Japan Machinery Orders Drop More Than Expected in January

Japan’s core machinery orders surged 19.1% month-on-month to ¥1,052.5 billion in December 2025, rebounding from an 11% drop in November and marking the strongest growth on record amid solid factory investment. That also bear market expectations for a 4.5% increase, driven by one-off large bookings from refineries and nuclear fuel producers. The rebound was led by a 25.1% jump in manufacturing orders to ¥498.3 billion, while non-manufacturing orders advanced 8.2% to ¥533.1 billion. By industry, the largest increases were recorded in petroleum & coal products (499.9%), non-ferrous metals (207.1%), other non-manufacturing (83.5%), real estate (67.3%), and business-oriented machinery (67.1%). On a year-on-year basis, private-sector orders climbed 16.8% in December, reversing a 6.4% contraction in November and surpassing forecasts for a 3.9% rise. Core machinery orders are widely regarded as a volatile yet important leading indicator of capital expenditure over the next six to nine months.

Japan’s core machinery orders fell 11% month-on-month to ¥883.9 billion in November 2025, reversing a 7% gain in October and marking the steepest drop since April 2020. The decline was far worse than market expectations for a 5.1% fall. Manufacturing orders slid 10.8% to ¥398.2 billion, while non-manufacturing orders dropped 10.7% to ¥492.9 billion. By industry, the sharpest contractions were seen in non-ferrous metals (-66.6%), iron and steel (-37.9%), textile mill products (-33.4%), finance and insurance (-32.6%), and mining, quarrying of stone and gravel (-32.1%). On a year-on-year basis, private-sector orders fell 6.4%, reversing from a 12.5% increase in October and missing forecasts for a 4.9% gain. Core machinery orders are widely viewed as a volatile but key leading indicator of capital expenditure over the next six to nine months.

Japan’s core machinery orders, which exclude volatile sectors such as ships and electric power, jumped 7% month-over-month to ¥992.9 billion in October 2025, accelerating from a 4.2% gain in September and defying market expectations for a 2.3% decline. The October reading was also the highest since March. The gain was driven by a sharp rebound in the non-manufacturing sector, where orders surged 28.8% to ¥551.7 billion. In contrast, manufacturing orders fell 13.3% to ¥446.5 billion. By industry, the strongest increases were recorded in information services (103.4%), goods leasing (984.7%), transportation and postal activities (47.9%), telecommunications (44.8%), and textile mill products (35.9%). On a year-on-year basis, private-sector orders increased 12.5% in October, up from an 11.6% gain in September and well above forecasts of 3.6%. Core machinery orders are widely viewed as a key, albeit volatile, leading indicator of capital expenditure over the next six to nine months.