The oldest piece of equipment at Osaka Machine Tool Co. has been there so long that only the company's 70-year-old chairman, Katumi Takata, still knows how to use it. He isn't planning to replace it anytime soon.

Many other Japanese manufacturers are equally reluctant to spend money. The average age of their facilities and equipment is the highest in at least three decades, according to Dai-ichi Life Research Institute, and has risen faster than in rival industrial powerhouses such as the U.S. and Germany.

The aging of Japan's industries threatens to worsen the hollowing-out of domestic manufacturing experienced in recent decades, undermining Prime Minister Shinzo Abe's efforts to stoke an economic recovery from a recession last year. The latest signals underscore the concern: a central bank survey of companies this month indicated they plan to cut investment this year, even amid near-record holdings of cash.