Core Japanese machinery orders rise for 1st time in 5 months in Feb.+

TOKYO, April 9 Kyodo -
Core private-sector machinery orders in Japan unexpectedly rose for the first
time in five months in February, helped by an apparent pickup in some
nonmanufacturing businesses, the government said Thursday.
Despite continued weak overseas demand, orders grew a seasonally adjusted 1.4
percent from January to 728.1 billion yen, which compares with the average
market forecast of an 8.1 percent drop in a Kyodo News survey.
Among nonmanufacturers, the transport and agricultural sectors contributed
significantly to the better-than-expected reading, with orders increasing for
items such as railway vehicles and cultivating machinery, according to the
Cabinet Office.
Core private-sector machinery orders, which exclude those for ships and from
electric utilities, are regarded as a leading indicator of corporate capital
spending about six months ahead.
Following the expansion, the Cabinet Office changed its assessment for the
first time in three months, saying machinery orders ''remain on a downtrend,''
instead of using the expression ''drastically decreasing.''
This is the first time since May 2007 that its assessment has been revised
upward, according to the office.
But a Cabinet Office official warned against being too optimistic about the
future of the Japanese economy, noting that manufacturing and overseas
machinery orders remain at lowest levels.
Yuichiro Nagai, an economist at Barclays Capital Japan Ltd., also said it would
be premature to determine that the Japanese economy has bottomed out with the
latest recovery in core machinery orders.
''We have to keep close tabs on overseas demand and orders from
manufacturers,'' Nagai said. ''We have to wait until next month to see whether
there will be any improvement in these two key points.''
On a year-on-year basis, core private-sector machinery orders fell an
unadjusted 30.1 percent in February.
Overseas demand, an indicator of future Japanese exports, decreased 22.9
percent from January and 74.3 percent from a year earlier to a record low of
296.5 billion yen.
Orders from manufacturers declined 8.1 percent from the previous month to 202.5
billion yen, also at the lowest level since April 1987, when comparable data
became available, while orders from nonmanufacturers gained 3.3 percent to
521.8 billion yen.
Still, orders from some manufacturers were upbeat in the reporting month.
Orders from steelmakers rose 16.5 percent and those from the nonferrous metal
and textile industries grew 49.1 percent and 86.7 percent, respectively.
The automotive industry's orders shrank for the fifth straight month, down 7
percent from January. But the fall was not as sharp as those observed in past
months, which helped put the headline reading back into positive territory, the
official said.
The core orders exclude those for ships and from power companies as they tend
to vary widely due to their size.
The total value of machinery orders, including those placed by the public
sector and from overseas, to 280 manufactures in Japan fell 7.1 percent from
January to 1,459.3 billion yen, the third lowest on record.
==Kyodo