Japan Machinery Orders Drop Less Than Expected

Japan’s core machinery orders, which exclude volatile sectors such as ships and electric power, increased 13.6% month-over-month to JPY 1,115.9 billion in February 2026, reversing a 5.5% decline in the prior month and beating market expectations for a 1.1% drop. Manufacturing orders jumped 30.7% to JPY 569.5 billion, boosted by solid growth across key industries, including non-ferrous metals (419.1%), ship building (127.7%), chemical and chemical products (91.6%), other transport equipment (57.2%), pulp, paper and paper products (30.1%), autos, parts and accessories (20.9%), and petroleum and coal products (17.3%). Meanwhile, non-manufacturing orders rose 0.8% to JPY 568.4 billion, much slower than a 6.8% increase in January. On an annual basis, core machinery orders grew 24.7%, accelerating sharply from a 13.7% gain previously and easily beating forecasts for 8.5%.

Japan’s core machinery orders fell 5.5% month-on-month to ¥982.4 billion in January 2026, reversing a 16.1% surge in December but outperforming market expectations for a 9.6% decline. The drop was driven mainly by a 12.5% fall in manufacturing orders to ¥435.8 billion, while non-manufacturing orders rose 6.8% to ¥563.2 billion. By industry, the steepest declines were seen in petroleum & coal products (-75.9%), non-ferrous metals (-57.1%), other non-manufacturing (-43.5%), pulp, paper & paper products (-33.8%), and other manufacturing (-14.4%). On an annual basis, private-sector orders jumped 13.7% in January, easing from a 16.8% increase in December but exceeding forecasts for a 10.5% gain. Core machinery orders are widely viewed as a volatile yet key leading indicator of capital expenditure over the next six to nine months.

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.