Tokyo  - Machinery orders in Japan fell more than expected in July as weak demand from manufacturers indicated they were not confident that an uptick in their foreign sales would last, the government said Thursday.

The orders, an indicator of capital spending in the next three to six months, fell 9.3 per cent from June, which had seen a 9.7-per-cent jump, the Cabinet Office said.

Japanese manufacturers are cutting production and costs, including capital spending, as they face losses amid the global economic downturn.

Investors, however, were more optimistic of a global recovery as their buying sent Japanese stocks up Thursday.

Economists warned, however, that as governments' stimulus spending eases up, so could the recovery. (dpa)