RTTNews - Core machinery orders in Japan were down 1.3 percent to 727.9 billion yen in March compared to the previous month, the Cabinet Office said on Friday, significantly better than forecasts for a 4.6 percent decline after the revised 0.6 percent gain in February and the 3.8 percent fall in January.

On an annual basis, core machinery orders dropped 22.2 percent - but that was also better than forecasts for a 27.7 percent contraction after the 30.1 percent fall in the previous month.

For the first quarter, core machinery orders lost 9.9 percent compared to the previous three months. The outlook for Q2 suggests a 5.0 percent quarterly decline.

Producers of steel products and transport equipment saw fewer orders, while auto and general machinery firms gained more orders. Overseas orders jumped 46 percent.

As a result of the data, the Japanese government has raised its view on machinery orders, saying that the rate of decline is easing.

In February, the Cabinet Office raised its assessment of machinery orders for the first time since May 2007, saying that they were rising slightly but still on a downward trend. It had previously said that orders were declining sharply.

Commenting on the data, Japanese Finance and Economy Minister Kaoru Yosano said that he welcomed the signs of easing in the economic slowdown, but said that it was far too early to label the crisis at an end.

We need to remain alert about overall economic conditions, he said at his regular press conference.

Core orders exclude orders from electrical power companies and orders for ships, and are considered a barometer of future industrial capital investment.

Also on Friday, the Bank of Japan said that an index measuring the price of corporate goods in Japan fell 3.8 percent on year to 103.6 in April, marking the largest annual decline since June 1987. It was also sharper than the 3.0 percent decline that analysts had been expecting after the 2.2 percent annual decline in March.

On a monthly basis, corporate prices eased 0.4 percent versus expectations for a 0.2 percent gain after the 0.2 percent decline in March.

Export prices were up 1.6 percent on month but down 8.4 percent on year. Import prices added 0.8 percent on month but plummeted 23.9 percent on an annual basis.

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