Japan's core private-sector machinery orders fell a seasonally adjusted 15.6 percent in January to 763.8 billion yen, due to a sharp fall in orders from nonmanufacturers, the Cabinet Office said Monday.

It was the worst month-on-month fall since the government began recording machinery orders in the current format in April 1987, a senior Cabinet Office official said.

Total orders for January were also the lowest since the 735.3 billion yen logged in July 1987, the official said.

The January figure represents an unadjusted 22.2 percent fall from the previous year -- the eighth straight year-on-year decline.

According to the Cabinet Office, orders from nonmanufacturers fell a seasonally adjusted 20.3 percent in January from December to 489.8 billion yen. This comes out to unadjusted fall of 13.1 percent from the previous year.

The sharp drop was attributed to dips in orders mainly from the transport industry, gas companies, and financial and insurance services companies, it said.

Orders from manufacturers came to a record low of 278.6 billion yen, a decline of 5.5 percent from the preceding month and 33.1 percent from a year earlier.

"Machinery orders have remained on a declining trend. We must carefully look into business sentiment in the future," said Yoshihiko Senoo, director of the Business Statistics Department at the Cabinet Office's Economic and Social Research Institute, leaving his assessment unchanged for a fifth month.

Senoo said the worse-than-expected 15.6 percent decline in private-sector machinery orders may force the government to revise downward its projection of a 0.4 percent fall for January-March 2002.

Private-sector machinery orders are considered a leading indicator of corporate capital spending six to nine months ahead.

The core private-sector orders exclude those for ships and from electric power companies, which tend to be volatile due to their large size.

Machinery orders from the public sector dropped 0.4 percent from the previous month to 292.7 billion yen.

Foreign orders rose 12.5 percent to 499.5 billion yen, logging the second consecutive month-on-month increase.

Overall machinery orders, consisting of private, public and foreign orders plus ones placed via agents, came to 1.765 billion yen, down 6.2 percent.