Machinery orders down in January

Core private-sector machinery orders in Japan fell a seasonally adjusted 12.2 percent in January from a month earlier to 894.4 billion yen.

The Cabinet Office's Economic and Social Research Institute said Tuesday the figure represents an unadjusted 3 percent decrease from a year earlier, marking the first decrease in 13 months. It attributed the decline to high growth the previous month.

The 12.2 percent contraction means core machinery orders will need to mark double-digit growth for two consecutive months to clear the government projection of a 0.2 percent shrinkage in the first quarter of this year.

A Cabinet Office official said it is a "very high" target. However, the government maintained its upbeat assessment, saying "core machinery orders are increasing."

"The decline in core machinery orders in January is within a range of a fall in reaction to strong growth in December or the October-December quarter," the official said.

Private-sector machinery orders are considered a leading indicator of corporate capital spending six to nine months ahead.

The core orders exclude orders for ships and from electric power companies, which tend to vary widely due to their huge size.

The report says orders from manufacturers decreased 5.5 percent to 385.8 billion yen in January after a 4.5 percent rise in December.

Of the 17 manufacturing industries surveyed, machinery orders from 11 sectors, including automobiles and steel, fell mainly due to a surge in December.