A steep 13.1% plunge Japan's core-machinery orders in January from December may cancel government hopes for a first-quarter rebound in the sector. The drop, the first in four months, was much worse than the 1.4% forecast by economists and was attributed to moribund export markets in the U.S. and Europe. More broadly, the latest figure indicates that despite the arrival of Prime Minister Shinzo Abe's government and a surge in Japan's stock market, "positive sentiment has yet to result in an actual increase in capital spending activity," said Koya Miyamae, an SMBC Nikko Securities economist.

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