| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -11.0% | -13.9% to -5.5% | -5.5% | 19.1% | 16.1% |
| Year over Year | 9.7% | 6.2% to 16.0% | 13.7% | 16.8% |
Highlights
Japan's core machinery orders, a key leading indicator of business investment in equipment and software, posted a smaller-than-expected 5.5% drop on the month in January as service providers continued placing orders for computers to ease widespread labor shortages with automation and digitization. This partially offset a pullback in manufacturer demand, which was pushed down by declines in orders for nuclear facilities from non-ferrous producers and for chemical equipment from refineries.
Core orders, which exclude those from electric utilities and for ships, took a breather after surging 16.1% (revised from +19.1%) to the highest level in nearly 18 years in December and slumping 9.2% (revised from -11.0%) in November. The jump in December was mainly due to large one-off orders for chemical devices from refineries and for nuclear power facilities from the non-ferrous metal industry (nuclear fuel producers).
Before the Cabinet Office conducted its annual update on seasonal adjustments, effective with January data, the 19.1% jump in December 2025 was the largest on record (the data under the current format dates to April 2005) but since it was revised down, it now is the second highest pace of growth after the record high 16.5% rise marked in January 2008.
The Cabinet Office maintained its assessment that machinery orders are showing signs of a pickup despite the drop in January orders because they were basically in payback for large orders placed in December and core orders' three-month moving average slipped just 0.1% in January after rising a revised 3.8% previously.
Details:
Japan Jan core machine orders -5.5% m/m (Dec revised +16.1%), 1st fall in 2 months; median forecast -11.0% (range -13.9% to -5.5%)
Japan Jan core machine orders +13.7% y/y (Dec +16.8%); 2nd straight rise; median forecast +9.7% (range +6.2% to +16.0%)
Japan govt maintains view: machinery orders showing signs of pickup
Japan govt: keeping view on machine orders as Jan drop in payback for large one-off orders in Dec, 3-month moving average dips just 0.1%
Japan Jan machine order m/m fall led by lower orders for nuclear power facilities, construction machinery
Japan core machine orders make relatively solid start to Q1, may end up firmer than official projection of -4.2% q/q for JanMar
Market Consensus Before Announcement
Japan’s core machinery orders, a key leading indicator of business investment in
equipment and software, are expected to decline for the first time in two months on the
month in January in reaction to large orders for chemical devices from refineries and
for nuclear power facilities from the non-ferrous metals industry (nuclear fuel
producers) in the previous month, which boosted month-on-month orders to the highest
level in nearly 19 years.
Core machinery orders are projected to fall 11.0 percent on the month in January after
soaring 19.1 percent in the previous month, which was also supported by ongoing services-
sector demand for computers amid an automation and digitization drive aimed at
alleviating labor shortages. On a year-on-year basis, core orders, excluding those from
electric utilities and for ships, are expected to rise 9.7 percent, after gaining 16.8 percent in
December.
In January, shipments of capital goods for domestic demand are expected to fall, while
machine tool orders for domestic demand are expected to increase. Nevertheless,
reflecting the expected reaction to December’s surge, core machinery orders in
January are projected to decline on a monthly basis.
In December, the Cabinet Office maintained its assessment that “machinery orders are
showing signs of a pickup” for the second straight month. The government office
upgraded its view in October from “pickup stalling,” marking the first upward revision
since November 2024.
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.