Core private-sector machinery orders fell a seasonally adjusted 3.1 percent in July from a month earlier to 924.6 billion yen in an apparent reaction to strong gains in May and June, the Cabinet Office said Tuesday.

The drop in the core private-sector orders, considered a leading indicator of corporate capital spending six to nine months ahead, followed a 2.4 percent rise in June and a 6.5 percent expansion in May.

Compared with a year earlier, the July core orders rose an unadjusted 6.1 percent, the office's Economic and Social Research Institute said.

The core orders exclude orders for ships and from electric power companies, which tend to be volatile due to their huge size.

Despite the decline in the July data, the government maintained its assessment that machinery orders are on a rising trend.

"The fall was mainly due to a reaction to expansions in the previous months, so we believe machinery orders are still gradually increasing," a Cabinet Office official said.

The official said the government's forecast of a 2.2 percent rise in the July-September period can be achieved if core machinery orders rise an average of 1.7 percent in the remaining two months.

According to the Cabinet Office, orders from manufacturers fell 6.8 percent in July from a month earlier to 360.3 billion yen, following a 0.8 percent decline in June.