Japan's core private-sector machinery orders plunged by a record 19.5 percent in May, the government said Thursday, indicating the first consumption tax hike in 17 years on April 1 is affecting the economic outlook by discouraging companies from beefing up investment.
The orders, excluding those for ships and from utilities because of their volatility, fell following a seasonally adjusted 9.1 percent drop in April. In March, the orders soared 19.1 percent, the fastest growth since comparable data became available in April 2005, the Cabinet Office said.
The value of the orders, widely regarded as a leading indicator of capital spending, slid to ¥685.3 billion, the smallest since January 2013, prompting the government to downgrade its basic assessment of the orders.