"Corporate capital spending is likely to have bottomed out and head towards a recovery from January-March"
- Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities
Surprisingly, Japanese core machinery orders rebounded in December, posting the third consecutive month of gains, as companies were expecting more improvement in the first quarter of 2013 due to more aggressive stimulus measures to be announced soon. Core machinery orders, a gauge of capital spending in the coming six to nine months, added 2.8% in December, after a 3.9% gain in the preceding month and above analysts' expectations of a 0.7% decline. Orders rose 2.0% during the last quarter of 2012, supporting Prime Minister Shinzo Abe who has pledged bold economic and fiscal policy to revive the economy and beat deflation. In the meantime, the world's third largest economy is expected to grow moderately this year, as exports should pick up supported by global economic rebound and Abe's ambitious economic policy.
"Corporate capital spending is likely to have bottomed out and head towards a recovery from January-March," said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities.
"Companies have been cautious about capital spending due to a strong yen but the yen's recent weakening and rising share prices are expected to boost corporate profits and thus encourage capital spending."
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