Japan Machinery Orders Drop More Than Expected in January

Japan’s core machine orders, which exclude volatile sectors such as ships and electric utilities, rose by 5.2% month-on-month to JPY 1,069.8 billion in August 2026, reversing a 3.7% decline in the previous month and exceeding market forecasts for a 3% gain. It marked the fourth month of increase so far this year, supported by rebounds in both manufacturing orders (1.6% vs -1.0% in July) to JPY 527.0 billion and non-manufacturing orders (2.9% vs -2.6%) to JPY 541.3 billion. Among manufacturers, non-ferrous metals posted the strongest growth (132.6%), followed by other transport equipment (43.7%), petroleum and coal products (19.6%), and automobiles, parts, and accessories (13.1%). In the non-manufacturing sector, goods leasing (136.0%), wholesale and retail trade (29.2%), and mining and quarrying posted solid rises. On an annual basis, machinery orders increased by 18.6%, up from 11.2% in July and above consensus of 15.7%. It was the fastest yearly growth in six months.

Japan’s core machine orders, which exclude volatile sectors such as ships and electric utilities, fell by 3.7% month-on-month to JPY 1,016.9 billion in July 2026, exceeding market expectations for a 2.8% drop and slipping from a 9.7% gain in the previous month. It marked the fourth month of decline so far this year, driven by a 1% fall in manufacturing orders to JPY 518.6 billion and a 2.6% drop in non-manufacturing orders excluding utilities to JPY 525.9 billion. Among manufacturers, steep declines were recorded in non-ferrous metals (-82.2%), other transport equipment (-41.4%), and chemical and chemical products (-12.0%). In the non-manufacturing sector, real estate (- 26.4%), telecommunications (-23.2%), and information services (-16.9%) posted notable decreases. On an annual basis, machinery orders grew by 11.2%, falling short of forecasts for a 15.3% expansion and slowing from a four-month high of 16.9% increase in the preceding period.

Japan’s core machinery orders, which exclude volatile sectors such as ships and electric utilities, jumped 9.7% month-on-month to JPY 1.06 trillion in June 2026, shifting from a 12.4% drop in the prior month and exceeding market forecasts of a 7.8% gain. It was the third time of increase so far this year, also marking the fastest pace since February, reflecting broad-based recovery in business investment. Orders from manufacturers bounced back 19.9% (vs -14.9% in May), while non-manufacturing orders improved (4.5% vs 9.3%). Among manufacturers, the strongest growth came from non-ferrous metals (225.3%), shipbuilding (94.9%), chemicals (39.0%), and petroleum and coal (32.9%). In the non-manufacturing sector, orders strengthened in real estate (253.1%), agriculture (33.0%), and mining, quarrying (23.7%). On an annual basis, machinery orders expanded 16.9%, swinging from May's 1.9% decline and topping estimates for a 10.8% rise and pointing to the fastest rise in four months.