Japan's core private-sector machinery orders declined 3.2 percent in January from a month earlier, the Cabinet Office said on Monday.
According to the latest statistics, the orders, excluding volatile ones for ships and from utilities, totaled 837.9 billion yen (7.3 billion U.S. dollars), in the reporting period.
January's decline bucked median analysts' expectations for 0.5 percent rise and compared to a year earlier core orders dropped 8.2 percent, compared to market expectations for a 3.3 percent increase.
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.
Such business investment accounts for around 15 percent of Japan's gross domestic product.
The unexpected decline in January will be a setback for the government who has been counting on capital expenditure to kick-start growth, against a backdrop of economic malaise and lack of significant growth drivers.
The Bank of Japan, for its part, has been struggling to combat deflation and is some way off reaching its 2 percent inflation goal, the deadline of which has been delayed multiple times.
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