 Analysts say corporate spending remains solid |
Machinery orders by Japanese firms dropped by more than forecast in February, official figures have shown. Core private-sector machine orders - deemed a key indicator of corporate investment - were down by 5.2% in February compared with January.
Year-on-year, domestic orders were weak but foreign orders rose strongly.
Despite the overall fall, analysts still think corporate spending remains strong. On Tuesday, the Bank of Japan opted to keep interest rates at 0.5%.
In February, the Bank of Japan had lifted rates by a quarter percentage point to 0.5% - their highest level in 10 years.
The latest machinery order figures did not alter analysts' views that the central bank is unlikely to raise rates again before the latter half of the year.
Solid outlook
"(The machine orders data) is weaker than expected, but this alone does not mean that capital spending will falter," said Kiichi Murashima, an economist with Nikko Citigroup.
A recent survey of Japanese corporate sentiment, the Tankan, indicated that capital spending is set to rise 2.9% in the financial year from 2007 to 2008.
Economist Takahude Kiuchi of Nomura Securities said core orders were likely to improve later in the year, after April as "the US economy is expected to achieve a soft landing".
Year-on-year, core domestic orders - which strip out volatile demand from power firms and for ships - were down 4.2% in February, while foreign orders were up 15.6%.
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