Japan's core machinery orders drop 1.4 percent on month in May

Japan's core machinery orders fell an expected 1.4 percent in May on a seasonally adjusted basis from a month earlier, marking the second straight month of decline, the Cabinet Office said on Monday.

The government office also downgraded its basic assessment of core machinery orders, stating that they are now "at a standstill" from last month's assessment of the orders "showing signs of picking up."

The latest figures showed that core machinery orders totaled 785 billion yen (7.8 billion U.S. dollars), in the recording period with the 1.4 percent decline coming on the heels of an 11 percent tumble in April.

In the manufacturing sector orders declined 6.4 percent to 311.5 billion yen, the Cabinet Office said, while non-manufacturing orders edged down 0.3 percent to 473.8 billion yen.

Total orders including all domestic and overseas ones plunged 11.5 percent to 2.01 trillion yen, the government also said, adding that overseas demand, a gauge of future exports, retreated 14.8 percent to 740.7 billion yen.

Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period head.

Such business investment accounts for around 15 percent of Japan's gross domestic product. Endit