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Tokyo. Japan’s core machinery orders tumbled twice as much as expected in July in a sign that companies are delaying investment due to worries about the strong yen, faltering global growth and slow progress in rebuilding from the March earthquake and tsunami.

The data is the latest in a series of disappointing figures, including July exports and output, that cast doubt over the strength of Japan’s expected recovery from its post-quake slump. The report could put pressure on the government and the Bank of Japan to act to ensure that the yen does not strengthen further by intervening in the market and further easing monetary policy.

The brisk pace at which Japanese companies restored supply chains and production crippled by the March 11 disaster had convinced economists that the world’s third-largest economy will resume growth this quarter, expanding at the fastest rate among major developed nations.

Yet the latest statistics suggest the yen’s recent strength, concerns about Europe’s sovereign debt crisis and fears that the world economy could slip back into recession are beginning to bite.

“Monthly data suggest the economy has already seen a V-shaped recovery and is likely to see only flat growth or even deceleration from the autumn and there is an emerging risk of a contraction in the fourth quarter,” said Taro Saito, senior economist at NLI Research Institute.

Core machinery orders, a leading indicator for corporate capital spending, fell 8.2 percent in July from the previous month, Cabinet Office data showed on Thursday. That compared with a median market forecast for a 4.1 percent decline and follows a 7.7 percent rise in June.

Compared with a year earlier, core orders increased 4.0 percent in June, much less than an 8.5 percent rise expected by economists.

Separate data showed the current account surplus fell more than expected in the year to July as exports weakened. A service sector sentiment index also published on Thursday, fell for the first time in five months in another sign that the yen’s strength and recession fears were sapping business confidence.

“Uncertainty on overseas economies started to increase in July, which may have prompted some corporations to rein in their capital spending on lower expectations for business growth,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance .

Sumco, the world’s No.2 supplier of silicon wafers used to make chips, on Wednesday slashed its annual operating profit forecast by 37 percent on weak PC demand and slower-than-expected growth in smartphones and tablet PCs, and said the fragile economy could make demand retreat further.

Adding to pressure on exporters, the yen has been attracting safe-haven demand from investors unsettled by Europe’s debt crisis and the US economic slowdown, even as Japan struggles with its own debt burden and its new government faces a long battle to gain consensus over how to fund its biggest rebuilding effort since the years after the World War Two.

The currency stabilized in the past days below its record highs hit in mid-August allowing the central bank to keep its policy on hold on Wednesday after it eased in August.

Reuters