Japan Machinery Orders Rebound More than Expected

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.

Japan’s core machinery orders, which exclude volatile sectors such as ships and electric utilities, plunged 12.4% mom to JPY 962.0 billion in May 2026, far worse than market forecasts for a 4.2% decline and a reversal from an 8.7% gain in the prior month. It was the third monthly decline so far this year and the steepest drop since December 2019, reflecting broad-based weakness in business investment. Orders from manufacturers dropped 14.9% (vs 5.1% in April), while non-manufacturing orders fell 9.3% (vs 6.7%). Among manufacturers, the steepest declines came from shipbuilding (-80.5%), information and communication electronics (-23.6%), and business-oriented machinery (-14.3%). In the non-manufacturing sector, orders weakened notably in real estate (-69.3%), transport and postal (-23.3%), and goods leasing (-18.6%). On an annual basis, machinery orders fell 1.5%, swinging from April's 15.6% surge and missing estimates for a 12.9% gain and pointing to the fastest drop in six months.

Japan’s core machinery orders, which exclude volatile sectors such as ships and electric power, rose by 8.7% month-on-month to JPY 1,098.5 billion in April 2026, far exceeded market expectations for a 0.9% gain and marked a sharp rebound from the 9.4% decline recorded in March. The recovery was driven by a 5.1% increase in manufacturing orders to JPY 513.5 billion and a 6.7% rise in non-manufacturing orders excluding utilities to JPY 570.1 billion. Among manufacturers, strong gains were recorded in ship building (+160.7%), textile mill products (+61.7%), and non-ferrous metals (+51.3%). In the non-manufacturing sector, real estate (+107.7%), transportation and postal activities (+36.9%), and goods leasing (+32.7%) posted notable increases. On an annual basis, core machinery orders grew by 15.6%, beating market forecasts for a 9.3% gain and accelerating from a seven-month low of 5.9% rise in the preceding period.