Major Japanese corporations are planning to invest 0.2 percent more on equipment in fiscal 2000, the first increase in four years, the government-affiliated Development Bank of Japan said Tuesday.

The planned spending by the 2,965 surveyed companies, capitalized at at least 1 billion yen, totals 24.447 trillion yen.

"The declining trend in capital investments appears to be halted as slight increases are expected in both manufacturing and nonmanufacturing sectors," an official at the bank said.

The rise is small because major increases are projected only in the manufacturing sector, such as makers of electronics components, the official added.

Sharp increases are planned by electric machinery makers, including those building semiconductors and liquid crystal displays, according to the bank.

The bank is cautious about the outlook for private-sector capital investment, a driving force of the economy, because automakers and chemical companies and other industrial sectors whose investments tend to have a benign impact on a broad range of other sectors are planning less spending or only a marginal rise.

Automakers, in fact, are planning to spend 0.7 percent less.

Furthermore, the bank noted a 0.2 percent decline in the telecommunications and data services sectors.

Manufacturers are planning an increase of 0.3 percent, the first rise in three years, if realized.

Against the backdrop of expanding demand both in and out of Japan, electric machinery firms are boosting investments by 12.7 percent.

Precision machinery makers and ceramics companies are also projecting marked increases.

Investments by food companies and steelmakers are projected to decline year on year in reaction to major investment spending they allocated in the previous year.

In the nonmanufacturing sector, investments are projected to grow for the second consecutive year, by 0.2 percent for fiscal 2000.

Power utility companies are planning an increase of 4.4 percent but the bank noted that these companies may revise their investment plans downward because of the increasing need to streamline their operations.

For fiscal 1999, capital spending in all industrial sectors is projected to drop 3.4 percent, with a 0.8 percent rise expected for nonmanufacturers, the first rise in three years, and a sharp 11.8 percent fall for manufacturers.

The survey was conducted on Feb. 10.

Improvement slight

Business sentiment of managers in 14 of 19 industrial sectors remained the same in March compared to January, while strong demand for information- and technology-related products and the pickup in the Asian economy buoyed sentiment for managers in the remaining sectors, the Economic Planning Agency said Tuesday.

Better sentiment was seen in the steel, industrial machinery, machine tool, telecommunications equipment and advertising industries, the EPA said.

"We are seeing more signs of improvement. The sentiment is better than in the report two months ago," said an official at the EPA. "Demand in mobile phones and personal computers continues to contribute to brisk business in the semiconductor industry," he said.

The bimonthly report showed that sentiment in the remaining sectors such as chemicals, paper, household appliances and automobiles, was unchanged, the agency said.

Index revised up

The diffusion index of leading economic indicators, which forecasts economic trends several months ahead, stayed above the boom-or-bust line of 50 percent in January for the 11th straight month, according to a revised report released Tuesday by the Economic Planning Agency.

The EPA said it has revised the index of leading indicators to 54.5 percent from 50.0 percent for December and to 88.9 percent from 85.7 percent for January.

A reading above 50 percent is considered to indicate economic expansion, while one below that level is taken to point to a contraction.

The agency also revised its diffusion index of coincident indicators, which gauges the current condition of the economy, from 87.5 percent to 90 percent for January.

Service sector gains

Activity in the nation's service industry in January increased 0.5 percent from December, marking the third straight month of increase, the Ministry of International Trade and Industry said in a preliminary report released Tuesday.

The seasonally adjusted index of service industry activity reached 105 against a 100-point benchmark established in 1995, marking the highest level since March 1997.

The latest figure raises the index of overall industrial activity, including industrial output, up 0.5 percent from December to 102.2.

January's increase was attributed to travel- and entertainment-related businesses, including inns and transport businesses, as well as the communications, finance and insurance sectors.

The introduction of a three-day weekend scheme -- which moved Coming-of-Age Day to the second Monday in January -- helped boost consumer spending, the ministry said.

"The overall business prospects are getting brighter," a MITI official said, noting that the number of businesses reporting year-on-year increases in activity has been exceeding the number of those otherwise since November.

In accordance with a law change in 1998, the government, starting this year, shifted two national holidays in January and October to the second Mondays of those months.

The shift apparently helped boost leisure- and travel-related activities in January. This, together with robust sales of automobiles, served to offset a slump in retail and wholesale sales, which reacted against temporary-boosted demand related to concerns in December over possible Year 2000 computer problems, the official said.