TOKYO (AP) -- Japanese machinery orders, a closely watched indicator of future business investment, fell in January as companies reined in spending after a big jump the previous month.
Core machinery orders declined 3.7 percent from December to 723.8 billion yen ($8 billion), the government said Wednesday. The figure excludes often volatile numbers from shipbuilders and electric power companies.
Despite the drop, the result beat expectations and confirmed an overall recovery in orders since bottoming last year. Economists surveyed by Kyodo News agency had predicted an average 4.4 percent fall.
"Although the pace of recovery in machinery orders remains mild, today's data reaffirmed a gradual improvement in corporate activity, led by the manufacturing sector," said Junko Nishioka, chief economist at RBS Securities Japan.
Orders from manufacturers climbed 3.3 percent, thanks to exporters like electronics companies and automakers. Rising demand in China and elsewhere in Asia are bolstering factory output and underpinning Japan's recovery.
But overall orders received by 280 manufacturers slid 3.7 percent due to lackluster demand from customers like telecommunications and transportation companies. Orders from non-manufacturers tumbled 12.9 percent.
Overseas orders fell 8.8 percent, while government orders surged 20.8 percent.