By MarketWatch
SAN FRANCISCO (MarketWatch) -- Japan's closely watched core machinery orders declined in January at a rate that matched analysts' expectations, while the country's wholesale prices rose slightly in February, according to data published Wednesday.
Core machinery orders data showed a 3.7% drop in January, the Cabinet Office said. The result matched analysts' average expectations, according to Dow Jones Newswires, but was below a 4.4% forecast drop reported by the Kyodo news agency.
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Private-sector core machinery orders, which exclude volatile shipping and electric-power orders, are considered a leading indicator of the nation's capital spending.
Compared to January 2009, core orders were down 1.1%. However, reports cited the government as saying the indicator was bottoming out.
Total orders were also down 3.7% from December.
Some analysts saw the data as offering an upbeat outlook for the wider economy, despite the drop in orders.
RBS analysts led by Junko Nishioka said that, while such sectors as telecommunications and construction appear on a downward trend, Wednesday's number paint a rosier picture for the manufacturing sector.
"In particular, the consecutive monthly increase of orders from automobiles is the most encouraging result. Electrical machinery also increased consecutively in December and January, largely boosted by the v-shaped recovery of exports and fiscal stimulus measures implemented last year," they said.
"The recovery is not balanced, but we think it is a clear signal that business activity continues to recover steadily," the RBS team said, adding that they expect Japan's capital expenditures to return to positive growth by July.
Separately, the Bank of Japan reported Wednesday that the corporate goods price index rose 0.1% in February from the month before, the Bank of Japan reported. Compared to a year earlier, the CGPI measure of wholesale prices was down 1.5%.
The results matched expectations as reported by Kyodo. In January, the index had risen 0.3% month-on-month and fallen 2.1% year-on-year.
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Jon Friedman
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