"This month was a rebound from the considerable fall last month"
- The Cabinet Office
Core machinery orders, which exclude ships and utilities, rose more than initially was expected, reaching the highest level since June 2012, a sign that investors are feeling more optimistic about the economy.Japan's core machinery orders rose 7.5% in February, rebounding from a sharp fall in the previous month, government data showed on Thursday. Analysts, however, expected only a 6.9% gain. Compared with a year earlier, core orders, which are considered to be an indicator of capital spending in the coming six to nine months, fell 11.3% in February. The Cabinet Office also said that achieving the government's forecast for an overall 0.8% rise in the first quarter or at least record growth for the period would be difficult.
"This month was a rebound from the considerable fall last month," said a government official briefing reporters on the data. "Our assessment is still that (the indicator) is gradually recovering."
"Keeping expectations high will be extremely difficult for Kuroda," said Nobuyasu Atago, principal economist at the Japan Center for Economic Research in Tokyo and a former BOJ official. "The new central bank leadership will probably use the Tankan result as a reason to add monetary stimulus, as they'll argue that the BOJ shouldn't be throwing cold water on business confidence."
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