Japan's machinery orders unexpectedly rose in May, offering policymakers some comfort that capital expenditure has held up despite the hit to corporate profits from the coronavirus pandemic.
But the increase in headline orders was due to demand from the services sector, masking a plunge in external and manufacturing orders, clouding the outlook for Japan's export-reliant economy.
"The gain is likely to be one-off given weak demand from sectors like automobile, capital goods and general-purpose machinery, which hold the key to capital spending," said Takeshi Minami, chief economist at Norinchukin Research Institute.