Japan machinery orders drop sharply, casts doubt on capex

Japan's core machinery orders fell 8.8% in February following a 13.4% jump in January, casting a shadow on the economy - Reuters Photo.

TOKYO: Japan's core machinery orders fell sharply in February, casting doubt on the strength of capital spending as early signs suggest the world's third biggest economy may struggle to cope with a sales tax hike that kicked in this month.

Core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, declined 8.8%, Cabinet Office showed on Thursday.