UPDATE 1-Japan's June core machinery orders unexpectedly fall

(Adds detail, background)

* June core orders -1.9 pct vs f'cast +3.7 pct

* Firms expect core orders to rise 7.0 pct in Q3

* Core orders down 4.7 pct in April-June qtr/qtr

TOKYO, Aug 10 (Reuters) - Japan's core machinery orders unexpectedly fell for a third straight month in June, underscoring companies' reluctance to boost spending and conflicting with recent signs that the economic recovery is gathering momentum.

Core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, decreased 1.9 percent in June from the previous month, Cabinet Office data showed on Thursday.

The fall in core orders compared with a median market forecast for a 3.7 percent increase, and followed a 3.6 percent tumble in May that prompted the government to cut its assessment on machinery orders.

Companies surveyed by the Cabinet Office forecast that core orders would rise 7.0 pct in the July-September quarter compared with April-June, where there was a 4.7 percent decrease.

Robust global demand has boosted Japanese business confidence to a three-year high in the there months to June, heightening policymakers' hopes that cautious companies will finally increase spending on plant and equipment.

A sustained economic recovery would help the Bank of Japan's efforts to stamp out persistent deflation, though wages and inflation remain stubbornly low despite recent signs of rebounding private consumption.

Japan's economy expanded an annualized 1.0 percent in the first quarter on robust exports.

Data due on Monday is likely to show the economy grew for a sixth straight quarter in April-June, a Reuters poll showed, buoyed by robust consumer spending and corporate capital investment. (Editing by Richard Borsuk)