TOKYO (AP) -- Japanese machinery orders, a closely watched indicator of corporate spending, posted the steepest monthly fall on record in November as businesses slashed investment to ride out an ever-deepening recession.
Core private sector machinery orders, which exclude often-volatile orders from electric power firms and shipbuilders, plunged 16.2 percent from the previous month to 754.2 billion yen ($8.38 billion) -- the fastest pace of decline since the government survey began in 1987, the Cabinet Office said Thursday.
The grim result widely undershot expectations for a 7.7 percent drop in a market survey by Kyodo News agency and was far worse than October's 4.4 percent decline.
The numbers contributed to a drop in the Japanese stock market Thursday, where the benchmark Nikkei 225 index tumbled nearly 5 percent to 8,2023.31.
The figures offer yet more evidence that "firms are cutting capital investment at an accelerated pace in response to deteriorated economic prospects," said Miwako Nakamura, an economist with JP Morgan Securities in Tokyo.
Machinery orders in the manufacturing sector fell 33.2 percent, while those among non-manufacturers rose 0.5 percent, the government said. Total private sector machinery orders, including those from utilities and shipbuilders, tumbled 17.3 percent.
Overseas machinery orders, down 14.4 percent in November, remained weak after a 37.2 percent decline in October.
The figures, considered an important gauge of business investment in the next several months, underscore the severity of the downturn hitting the world's second-largest economy.
Japan's export-reliant manufacturers in particular are reeling from waning foreign demand for the country's cars and gadgets, as well as a stronger yen.
Premier Japanese brands including Sony Corp. and Toyota Motor Corp. are among the many casualties. Both companies have reduced production, cut jobs and are expected to post rare operating losses for the fiscal year through March.