Japan's Machinery Orders Fall 5.4% in February

Figure represents second consecutive month of declining orders.

Japan's core private-sector machinery orders, a leading indicator of corporate capital spending, fell by a worse-than-expected 5.4% in February from the previous month, official data showed Thursday.

The drop contrasts with a forecast rise of 3.9% in a survey of economists by Dow Jones Newswires.

The February figure marks the second consecutive monthly fall, following a 3.7% decline in January after a robust 20.1% rise in December, showing the fragility of the recovery in the world's second largest economy.

The core orders exclude particularly volatile demand from power companies and for ships.

Core orders from manufacturing companies edged 0.3% lower month-on-month in February while those from non-manufacturers dropped 4%, the Cabinet Office said.

The Bank of Japan's Tankan index of business confidence last week showed that while most firms are still cautious about the economy, they expect profits to rise this year and plan to ease spending cuts on factories and equipment.

Copyright Agence France-Presse, 2010

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