New export orders won by Japanese firms jumped to the highest in almost six years in March in a sign the manufacturing sector will likely keep recovering on demand in emerging markets such as China, a survey showed on Wednesday. But as companies struggled to cope with stagnant domestic demand, earnings of Japanese workers fell for the 21st straight month in February and winter bonuses showed a record drop, government data showed.
"Companies are likely to remain cautious about boosting their capital spending and wages, because they can't expect a strong recovery in domestic demand over the long term," said Masamichi Adachi, a senior economist at J.P. Morgan Securities Japan. The index for new export orders, a leading indicator of Japanese exports, rose to 55.7 from 55.2 in the previous month, hitting the highest level since May 2004.