Japan's core machinery orders unexpectedly fell for a second straight month in May as the strong yen and weak demand weighed on corporate profits and spending, pointing to a tepid recovery in the business investment needed for sustainable growth.
Cabinet office data published on Tuesday showed a 1.4 percent fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, and fell well short of economists' forecast for a 2.6 percent gain in Reuters poll.
Weak capital expenditure puts extra pressure on Prime Minister Shinzo Abe to do more to rev up growth. He is expected to compile an economic stimulus package later this year after his ruling bloc won a landslide victory in Sunday's upper house election.
Abe has been counting on capital expenditure to help generate a virtuous growth cycle of higher wages and increased household income and consumption to drive growth.