(Adds detail, context on capex, broader economy)
* Feb core orders -8.5% mth/mth vs forecast +2.8%
* Core orders -7.1% in Feb yr/yr vs forecast +2.3%
* Govt cuts orders view, sees pick-up stalling
* Uncertainty over 4th wave of infections cloud outlook
By Tetsushi Kajimoto
TOKYO, April 14 (Reuters) - Japan's core machinery orders
unexpectedly declined in February for a second straight month,
government data showed, dashing hopes for a pick-up in capital
expenditure needed for a private sector-led recovery from the
coronavirus-induced slump.
Policymakers are counting on companies to spend their huge
cash piles on investment in plant and equipment and wage hikes
to help pull the world's third-largest economy out of deflation
and stagnation.
However, many companies tend to hoard cash as their appetite
for investment has waned amid the state of emergency in big
cities and worries over a fourth wave of coronavirus infections.
The Cabinet Office data on Wednesday showed core orders, a
highly volatile data series regarded as an indicator of capital
spending in the coming six to nine months, fell 8.5% in February
from the previous month.
A Reuters poll of economists had predicted 2.8% growth,
following a 4.5% drop in January.
By sector, manufacturers' orders declined 5.5% in February
from the prior month, while those from non-manufacturers also
decreased 10.9%, the data showed.
Many economists have forecast a contraction in economic
growth in the first quarter as COVID restrictions hampered
service-sector activity, such as hotels and restaurants, keeping
companies from boosting investment.
The Cabinet Office cut its assessment on machinery orders to
say a pick-up is stalling.
Underscoring solid overseas demand, external orders, which
are not counted as core machinery orders, jumped 76.2%
month-on-month in February, helped by a big ticket item that
gave a one-off boost, a Cabinet Office official said.
Compared with a year earlier, core orders, which exclude
those for ships and electric utilities, declined 7.1% in
February, versus a 2.3% gain predicted by economists.
(Editing by Jacqueline Wong)
