| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -8.4% | -9.4% to -4.9% | -11.0% | 7.0% |
| Year over Year | 1.0% | -0.5% to 5.8% | -6.4% | 12.5% |
Highlights
Japan's core machinery orders, a key leading indicator of business investment in equipment and software, took a breather in November, down a sharper-than-expected 11.0% on the month, after posting an unexpected 7.0% jump in October. The decline was led by lower orders for nuclear power facilities from producers of non-ferrous metals and electric machinery as well as those for train cars and engines from transport firms. Demand for computers from many sectors remains solid, reflecting the need for automation and digitization to address widespread labor shortages.
The Cabinet Office maintained its assessment that machinery orders are showing signs of a pickup, noting that the three-month moving average fell just 0.2% on the month after rising 3.5% previously. Last month, it upgraded its view for the first time since the November 2024 report.
Details:
Japan Nov core machine orders -11.0% m/m (Oct +7.0%), 1st fall in 3 months; median forecast -8.4% (range -9.4% to -4.9%)
Japan Nov core machine orders -6.4% y/y (Oct +12.5%); 1st fall in 14 months; median forecast +1.0% (range -0.5% to +5.8%)
Japan govt maintains view: machinery orders showing signs of pickup after upgrading last month
Japan Nov core machine orders manufacturing sector -10.8% m/m (Oct -13.3%); 2nd straight fall
Japan Nov core machine orders non-manufacturing sector -10.7% m/m (Oct +28.8%); 1st drop in 2 months
Japan Nov machine order m/m drop led by lower orders for nuclear power facilities from non-ferrous metals producers
Japan Nov machine orders fall also due to lower orders for train orders, engines from transport firms; computer demand remains solid
Market Consensus Before Announcement
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to decline on the month in November for the first time in three months, reflecting a reactionary pullback following the unexpected sharp rebound in orders from the transportation and postal services sectors in the previous month.
Core machinery orders are forecast to fall 8.4 percent on the month in November, after unexpectedly jumping 7.0 percent in October. On a year-on-year basis, core orders, excluding those from electric utilities and for ships, are expected to rise for the 14th consecutive month by 1.0 percent, but sharply lower from a 12.5 percent increase in October.
Definition
Machine Orders are the total value of new private-sector purchase orders placed with manufacturers for machines excluding volatile items such as ships and utilities. It is a leading indicator of production. Analysts consider the data an indicator of capital spending. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders.
Description
It is a leading indicator of production. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders. The importance of machinery orders cannot be overstated given the economy's dependence on exports. The purpose of these data is to get a picture of machinery manufacturers' order books and to collect basic material for analyzing the direction of the economy through an early understanding of trends in capital investment in machinery.