Tokyo  - Japan's key machinery orders fell 6 per cent in 2008 from a year before to 11.6 trillion yen (126.32 billion dollars), the Cabinet Office said Monday.

Core machinery orders, which are considered a key indicator for corporate capital spending about six months ahead, have been "drastically decreasing," the Cabinet Office said.

The key orders, which exclude those for ships and electric power companies, dipped 1.7 per cent to 741.6 billion yen, in December alone, compared to November. While the lowest level since July 1987, the drop is smaller than expected by analysts, giving cause for lessened pessimism.

Orders from manufacturers grew 7 per cent in the reporting month to 303.3 billion yen from November, and those from non-manufacturers dropped 8.3 per cent to 445.1 billion yen. (dpa)