TOKYO - JAPAN'S current account surplus fell 34.3 per cent in May from a year earlier, as exports and income gains from investment remained subdued.

The figure compared with a median market forecast for a 24.2 per cent decline.

The surplus was 1.3018 trillion yen ($20 billion) compared with a median forecast for 1.5033 trillion yen.

Japan's core private-sector machinery orders unexpectedly fell 3.0 per cent in May from the previous month, the Cabinet Office said on Wednesday, suggesting a recovery in capital spending may be delayed.

The fall compared with a median market forecast for a 2.1 per cent increase.

Core orders, which exclude those for ships and machinery at electric power firms, fell 38.3 percent in May from a year earlier, more than a median forecast for a 34.5 percent decline.

Exports and output have shown some signs of recovery amid Japan's worst recession since World War Two, but analysts say growth in the world's No. 2 economy will be fragile as many companies slash jobs and are likely to remain cautious on capital spending due to weak domestic demand. -- THOMSON REUTERS