Japan's machinery orders fell in April from the previous month, although not as much as most economists had expected.
Core orders, regarded as an indicator of capital spending in the coming six to nine months, declined by 1.0 per cent, data from the Cabinet Office showed today. The market had expected a 2.0 per cent drop.
Compared with the same month last year, April core orders, which exclude those for ships and equipment at electric power firms, rose 2.5 per cent, higher than the median forecast of a 1.2 per cent increase.
Machinery orders from overseas were at their highest level since June 2003.
"A negative reading for core orders in April was expected, but it looks like April-June core orders will be better than the government's projection for a 3.1 per cent decline. They may even be positive," said Yoshimasa Maruyama, economist at BNP Paribas.
"Companies are forward-looking on capital spending, and I think the numbers are finally beginning to reflect that."
Japan's economy expanded in the first three months of 2005 at the fastest pace in a year, at 1.2 per cent quarter-on-quarter or 4.9 percent on an annualised basis.
The two main factors behind the first-quarter growth were firm consumption and strong capital spending.