Japan November machinery orders seen growing at slower pace; December core CPI to weaken

TOKYO (Reuters) - Japan's core machinery orders are expected to have expanded for a second straight month in November but the pace of increase likely slowed, a Reuters poll found on Friday, suggesting a weak recovery in corporate capital spending.

Core machinery orders, a volatile data series regarded as an indicator of capital spending in the coming six to nine months, were seen rising 3.5 percent in November from the previous month after they rose 7.6 percent in October, the poll of 16 economists showed.

Machinery orders plummeted 18.3 percent in September, a record fall when an earthquake shook northern Japan and flooding disrupted business in the western parts of the country.

From a year earlier, core machinery orders, which exclude those for ships and electric power utilities, were forecast to have edged up 0.4 percent in November, the poll showed.

"The pace of rebounds after September's sharp fall in core machinery orders remains weak," said Koya Miyamae, senior economist at SMBC Nikko Securities.

"Other economic figures are picking up but corporations may postpone their capital spending due to uncertainly over the outlook such as the prospect of the U.S.-China trade war."

But analysts also said corporate demand for spending on labour-saving equipment due to a shortage of workers remained solid, which would likely underpin machinery orders.

The Cabinet Office will release the machinery orders data at 8:50 a.m. Japan time on Wednesday Jan. 16 (2350 GMT, Jan. 15).

The nationwide core consumer price index (CPI), which excludes volatile fresh food prices, was seen rising 0.8 percent in December from a year earlier, easing slightly from a 0.9 percent rise in November, the poll showed.

It would be a second straight month of easing prices and slowing consumer inflation would make it difficult for the Bank of Japan to reach its 2 percent inflation goal. That raises the probability the BOJ will hold off on whittling down its massive stimulus for some time.

"Falls in energy prices and carriage costs likely weighed on core CPI," said Hirotaka Yazawa, economist at Mizuho Research Institute.

The internal affairs ministry will announce data on consumer prices at 8:30 a.m. Tokyo time on Jan. 18 (2330 GMT on Jan. 17)

The poll showed the BOJ's corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, rose 1.8 percent in December from a year earlier after oil prices fell, slowing from a 2.3 percent rise in November.

(Reporting by Kaori Kaneko; Editing by Jacqueline Wong)