Japan's core machinery orders up 14.2% in March

Japan's core private-sector machinery orders jumped 14.2 percent in March, pointing to healthy capital spending by companies, the government said Friday. The March orders, totaling 793.1 billion yen ($7.75 billion), marked the second straight month of growth and the highest month-to-month increase since April 2005, the Cabinet Office said on its website. In February, the orders were up 4.2 percent. The private-sector orders excluded "volatile ones for ships and electric power companies," the report said. The increase was yet another indication that a recent surge in the Japanese stock market brought on by stimulus measures and a lower yen, helping exports, encouraged companies to increase investments, the Cabinet Office said. Officials said they expect the core orders to shrink in the current quarter ending June on the heels of the sharp rise in March. Kyodo News said the March increase was much higher than market expectations. Analysts told Kyodo the numbers suggested business investment, which has been weak in the past year, is likely to be on a recovery path. "Exports have been rebounding and corporate performance has been improving, which will help increase capital spending from the middle of 2013," Mitsumaru Kumagai, chief economist at the Daiwa Institute of Research, told Kyodo.