A key gauge of the current state of Japan's economy plunged below the boom-or-bust line of 50 percent in August for the first decline in 16 months, the government said Thursday.

The development fueled concerns that the recovery of the world's second-largest economy might have peaked.

The index of coincident economic indicators stood at 38.9 percent, down from a revised 80 percent in July, the Cabinet Office said in a preliminary report. The August reading snapped a streak of 15 straight months for the index to stay at 50 percent or above this threshold.