Japan June core machinery orders fall 10.4 pct from May, misses forecast

TOKYO (Thomson Financial) - Japan's core private-sector machinery orders fell a seasonally adjusted 10.4 percent from the previous month to 960.2 billion yen in June, after rising by 5.9 percent in May, the Cabinet Office said on

Wednesday.

The decline was much deeper than market expectations for a drop of 1.8 percent.

Core private-sector machinery orders, which exclude orders from electric utilities and for ships, are regarded as a leading indicator of corporate capital spending.

Year-on-year, machinery orders were down 17.9 percent in June after dropping by 3.1 percent in May.

Machinery orders placed by the manufacturing sector fell 11.4 percent in June from May and 23.6 percent lower than a year earlier.

Orders placed by non-manufacturers declined 6.5 percent from the previous month and were down 12.8 percent year-on-year.

For the April-June quarter, core machinery orders fell 2.4 percent from the previous quarter. The

Cabinet Office had forecast a fall of 11.8 pct.

Orders placed by manufacturers fell 4.0 percent in the second quarter from the previous three

months, while orders from non-manufacturers rose 0.1 percent.

Core machinery orders are forecast to rise 3.7 percent in the three months to September from the previous quarter.

(1 US dollar = 118.95 yen)