TOKYO (AP) -- Japanese machinery orders, an indicator of how much the country's companies plan to spend, rose in February for the first time in five months, offering a sign that the recession is loosening its grip on the world's second-largest economy.
Core private sector machinery orders, which exclude those from electric power companies and shipbuilders due to their volatility, grew 1.4 percent in February from the previous month to 728.1 billion yen ($7.3 billion), the government said Thursday.
Machinery orders had been expected to fall again in February with a Kyodo News survey of economists predicting a 8.1 percent decline. Machinery orders fell 3.2 percent in January.
Some sectors that had seen steep declines in recent months posted strong gains, including steel, nonferrous metals and precision instruments. Orders from automakers declined 7 percent, easing from January's 36.2 percent plunge.
A 2.2 percent increase in orders from non-manufacturers such as construction and mining companies also helped boost figures for the month.
Overseas orders retreated 22.9 percent in February, compared with a 49 percent fall a month earlier.
Chiwoong Lee, an economist at Goldman Sachs in Tokyo, cautioned against too much optimism due to persistent weakness in some areas, such as the accelerating declines in orders among tech-related manufacturers.
"However, we see indications of the bottom for domestic demand in the sense that orders should not deteriorate further, even if full recovery is not in sight," Lee said. "We envisage no worse than a low flat path supported by policy stimulus."
The government is planning a new stimulus package involving 15 trillion yen in fiscal spending, which would be Japan's largest-ever supplementary budget, according to Kyodo news agency.
The news, along with Thursday's data, sparked a stock market rally. The benchmark Nikkei 225 index was up 1.8 percent after the morning session.