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Economy

Japan machinery orders up for 2nd month, but cautious view retained

TOKYO (Kyodo) -- Japan's core private-sector machinery orders rose 3.8 percent in March from the previous month, the second straight monthly rise, propelled by strong demand for construction machineries and railway cars, government data showed Wednesday.

Despite the rise, the Cabinet Office maintained its assessment that orders, a leading indicator of capital expenditure, are "stalling" for a fourth consecutive month. The climb in orders followed a 1.8 percent rise in February.

"The figure for March was strong but when looking at the quarterly figure, it is still not at a level where we can upgrade our assessment," a government official said, noting that the core orders fell 3.2 percent in the January-March period.

The orders for the reported month, which exclude those for ships and from electric utilities because of their volatility, totaled 868.8 billion yen ($7.9 billion).

The latest figure followed the government's gross domestic product data released Monday showing that Japan's economy unexpectedly grew at an annualized rate of 2.1 percent in the first quarter due mainly to technical factors, while key drivers for growth such as capital spending and personal consumption remained sluggish.

Orders from the manufacturing sector fell 11.4 percent to 344.0 billion yen, while in the nonmanufacturing sector, excluding ships and electric utilities, orders climbed 13.4 percent to 511.7 billion yen.

Overseas demand for Japanese machinery, an indicator of future exports, expanded 9.0 percent to 1.07 trillion yen.

Total orders, including the public sector and from abroad, fell 4.3 percent to 2.25 trillion yen.

For the fiscal year through March, core orders rose 2.8 percent to 10.44 trillion yen. Looking ahead, the Cabinet Office projected a 15.7 percent increase in April-June quarter.

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