Japan's core machinery orders unexpectedly fell for a third month in November as companies delayed capital expenditure following an end to government subsidies, but economists say business spending will pick up this year as exports recover.
The surprise fall in the often-volatile data series was not large enough to discredit economists' predictions that Japan's economy will resume growing after a likely contraction in the fourth quarter of last year, as exports stabilise and factory output increases.
The trend for capital expenditure over the long term could be a source of comfort for Prime Minister Naoto Kan's government, which is preoccupied with garnering support from the opposition for next fiscal year's budget and a cabinet reshuffle that could come as early as Friday.
Core machinery orders fell 3.0 percent in November from the previous month, Cabinet Office data showed on Thursday. Orders at non-manufacturers were down 10.5 percent while manufacturers' orders rose 10.6 percent. A decline in orders at non-manufacturers for items such as cellphones and rail vehicles was largely to blame for the November slump.