According to the Cabinet Office, the orders, excluding those for ships and utilities because of their volatility, rose 3.7 percent in March from the previous month, totaling 798.06 billion yen (7.31 billion U.S. dollars).
The latest reading led the Cabinet Office to maintain its assessment that machinery orders are "showing signs of stalling in their recovery," after downgrading the view for February, which marked the first change to its view in eight months.
Orders in the reporting month from manufacturers shed 0.1 percent to 342.24 billion yen (3.13 billion U.S. dollars), dropping for the third straight month, the Cabinet Office also said.
According to a Cabinet Office official, however, overall momentum for the recovery remained, with the official specifying that the latest data showed that demand from sectors including electric machinery, automobiles, auto parts and accessories was strong.
Those from non-manufacturers, excluding ships and electric utilities, climbed 9.5 percent to 462.97 billion yen (4.24 billion U.S. dollars), marking the first rise in three months, as information services, transportation and postal activities contributed to the rise.
Overseas orders, which act as a barometer of future exports, however, tumbled 53.9 percent to 832.53 billion yen (7.63 billion U.S. dollars) in March, the Cabinet Office said.
The latest reading here came on the heels of a 76.2-percent climb the previous month, owing to orders for high-priced machinery, the Cabinet Office's data showed.
The total orders fell 30.0 percent to 2.12 trillion yen (19.43 billion U.S. dollars), with the drop coming on the heels of a 26.4-percent leap booked in February, the office's data showed.
Orders from the public sector rose 2.7 percent to 264.14 billion yen (2.42 billion U.S. dollars), marking the second month of increase, the Cabinet Office said.
The office also said for fiscal 2020 ended March, core orders fell 8.8 percent to 9.49 trillion yen (86.96 billion U.S. dollars).
This marked the second successive decline for an entire business year and was the largest since a 20.4-percent tumble was booked in the wake of the global financial crisis in fiscal 2009.
Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead.
A rise in capital expenditure can boost the economy as Japanese companies are producing more machinery to meet rising demands from overseas markets.
A drop in capital spending has the opposite effect and weighs on the economy and can see production tapered or significantly reduced.
Such business investment accounts for roughly 15 percent of Japan's gross domestic product.
Types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories.
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