Japan's machinery orders surged in January

Japan's January machinery data positive: Economist

Japan's core machinery orders rose 13.4 percent in January from a month earlier, well above analyst expectations in a Reuters poll for a rise of 7 percent, data on Thursday showed.

The data, which is an indicator or capital spending six to nine months down the line, is a positive sign that a pick up in business investment could be around the corner.

(Read more: Toyota gives Japan workers biggest pay raise in 21 years)

"They are obviously good numbers," Bank of Singapore Chief Economist Richard Jerram told CNBC Asia's "Squawk Box."

Tomohiro Ohsumi | Bloomberg | Getty Images

"Exports have been struggling but capex [capital expenditure ] is picking up, which suggest there is a broad lift across the domestic economy," he added.

Core machinery orders, regarded as a volatile number, rose 23.6 percent in January from a year earlier, above expectations for a 18.8 percent rise.

(Read more: Why you should be patient with Abenomics)

Japan's economy is getting back on its feet after almost two decades of poor growth and deflation. Aggressive monetary stimulus and a weak yen have helped boost growth and many analysts expect the Bank of Japan to deliver further stimulus in the months ahead.

— Follow us on Twitter @CNBCWorld