Tokyo- Japan's machinery orders fell 3.9 per cent in July in seasonally adjusted terms compared with the previous month, the government said Thursday.

Private-sector machinery orders declined an unadjusted 4.7 per cent from the same month a year before to 1.04 trillion yen (9.72 billion dollars), the Cabinet Office said.

Private-sector machinery orders are regarded as a leading indicator of corporate capital spending about six months ahead, and the second drop in two months indicated that manufacturers expected the global economic slowdown to further dampen demand.

But the readings were better than the average market expectation of a 4.1-per-cent monthly drop and a 4.9-per-cent year-on-year fall.

Orders from manufacturers fell a seasonally adjusted 10.4 per cent from June to 459.2 billion yen, and orders from non-manufacturers slid 2.4 per cent from the previous month to 588.4 billion yen.

For the July-September quarter, manufacturers expected machinery orders to fall 3 per cent from the previous quarter. (dpa)