TOKYO (AFX-ASIA) - The Cabinet Office said it is premature to predict an end to the falling trend of capital expenditure despite the narrowing of the decline in the fourth quarter and a projected improvement in economic confidence. Earlier, the office said its survey of domestic firms showed a decline in fourth quarter to December capex of 1.7 pct quarter-on-quarter, compared with a fall of 4.1 pct the previous quarter. However, fourth quarter capex was seen down 7.1 pct year-on-year, compared with a fall of 3.7 pct the previous quarter. Meanwhile, the index of confidence in economic conditions reached minus 60 in the December quarter, compared with minus 61 the previous quarter, and a forecast of minus 41 in the first quarter and minus 24 in the second quarter. "The overall index of confidence shows signs of some improvement but the trend in capex continues to worsen," an official said, adding that the outlook for the first half of the fiscal year is expected to continue to be weak. The electric machinery, services and real estate industries contributed the most to the continued negative reading of overall capital expenditure. However, the index of confidence in the electric machinery industry showed signs of improvement, reaching minus 30 in the first quarter and minus 9 the following quarter, compared with minus 55 in the fourth quarter last year.