Japan's core machinery orders rose at a slower-than-expected pace in December but companies expect orders to accelerate in January-March, an encouraging sign that industry is ready to increase spending.
Core orders, a highly volatile data series regarded as a leading indicator of capital spending, rose 4.2 percent in December, Cabinet Office data showed on Wednesday, less than the median estimate for a 4.7 percent month-on-month increase.
Companies expect orders to rise 8.6 percent in January-March, which would be faster than a 4.3 percent increase in the previous quarter, suggesting corporate Japan remains positive on the outlook for domestic demand.
The data is likely to be a source of relief for policymakers who are counting on capital expenditure to create more jobs and raise wages. However, if recent financial market turmoil continues, the change for big gains in business investment would diminish.