Core private-sector machinery orders fell a seasonally adjusted 4.5 percent in October as business investment remained weak, government data showed Thursday.
Core orders, which exclude volatile ship and electric utility orders, came to ¥704.5 billion, down for the first time in three months and almost matching the average fall of 4.3 percent expected in a survey of analysts. Core orders jumped 10.5 percent in September.
"The pace of decline is getting moderate," despite the volatility, the Cabinet Office said in its basic assessment, using the same expression it has been using since March.
Machinery orders are considered a key indicator of how corporate capital spending will fare in about six months' time.
Masamichi Adachi, senior economist at JPMorgan Securities Japan Co., said the figures added to the sense of ease in the market.
"Some had expected a larger fall in reaction to the sharp 10.5 percent hike . . . machinery orders show signs of having hit the bottom," said Adachi, who added that the result, when combined with industrial output, unemployment rates and other data, suggests the worst has passed.
By sector, orders from manufacturers rose 25.4 percent to ¥293.9 billion while those from nonmanufacturers, including the services industry, dropped 17.3 percent to ¥426 billion.
Precision machinery makers led manufacturers' advance, with orders shooting up 184.9 percent. But the upward momentum was blunted by declines in such sectors as steelmaking, which saw a 19.2 percent fall, nonferrous metal, down 25 percent, and ceramic engineering, down 29.2 percent.
Among orders from nonmanufacturers, the telecommunications sector slid 26.4 percent, the mining industry lost 72.6 percent, and banking and insurance services shed 20 percent.