TOKYO - Japan's core machinery orders fell in November and a survey showed consumer sentiments at their worst in more than four years, adding to growing worries about a global slowdown.
The indicators, released Wednesday, show both companies and individuals are cutting back on spending, hailing possible trouble ahead for the world's second largest economy.
Exports are expected to slow in coming months given the growing likelihood that the U.S. will slide into a recession as the housing market slowdown and subprime mortgage crisis causes American consumers to spend less. In Japan, too, declining wages here have crimped consumer spending.
Jitters about the U.S. economy and stronger yen sent the Nikkei 225 stock index down 3.4 percent Wednesday to its lowest in more than two years.
A quarterly Bank of Japan survey showed that the percentage of Japanese consumers who said economic conditions had worsened from a year earlier surged to 45.5 percent in December — the highest level since September 2003.
The survey cited rising prices and weaker wages as the reasons for their pessimism, and the number was worse than the 34.1 percent in the previous survey in September. The survey also showed that 46.4 percent polled said they expect the economy will take a turn for the worse a year from now.
Core machinery orders dropped 2.8 percent in November from October, when they jumped 12.7 percent on month, following a 7.6 percent decline in September.
Machinery orders are widely regarded as a leading indicator of corporate capital investment, which accounts for about 15 percent of Japan's economy. Core orders exclude those from electric power companies and those for ships, which are often volatile.
Banking Minister Yoshimi Watanabe acknowledged significant downside risks for the nation's economy.
Speaking in Niigata in northern Japan, Watanabe said the rising losses related to the U.S. subprime mortgage crisis were a reason for worries.
"There are a lot of industries suffering due to high costs," he said.
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