| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 3.4% | 2.4% to 4.6% | 5.2% | -3.7% |
| Year over Year | 15.3% | 14.3% to 18.7% | 18.6% | 11.2% |
Highlights
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, rebounded in August, up a solid 5.2% on the month to ¥1.070 trillion after slipping 3.7% in July and rebounding 9.7% in June on a 12.4% slump in May. The general pickup trend is still in place backed by strong global demand for memory chips and domestic needs to upgrade operations amid widespread labor shortages. The core measure rose 8.7% in April 2026 to a record high level of ¥1.099 trillion.
The August increase was led by a rebound in orders from non-ferrous metal producers, telecommunications service providers and the wholesale/retail category following a decline in those industries in the previous month.
Core orders, which exclude those from electric utilities and for ships, surged 18.6% on the year for their third increase after rising 11.2% in July.
The Cabinet Office maintained its assessment that machinery orders are “showing signs of a pickup." The three-month moving average rose 3.6% in August after falling 2.6% in July and rising 1.5% in June. In the June report, it projected that core orders would rise a solid 4.9% on quarter in the July-September period for a fourth straight increase.
The Bank of Japan’s quarterly business survey Tankan for September released on Oct. 1 showed that sentiment among manufacturers continued to improve, thanks to strong global demand for memory chips and equipment to produce them in artificial intelligence projects.
Large firms left their combined capital investment plans for fiscal 2026 little changed at a 11.3% increase over fiscal 2025, compared to a 11.5% rise projected in June. That was weaker than the median economist forecast of a 12.1% gain but the pace is still solid. Smaller firms revised up their plans to a 4.8% drop from an 8.3% fall, as expected.
Details:
Japan Aug core machine orders +5.2% m/m (July -3.7%), 1st rise in 2 months; median forecast +3.4% (range: +2.4% to +4.6%)
Japan Aug core machine orders +18.6% y/y (July +11.2%); 3rd straight rise; median forecast +15.3% (range: +14.3% to +18.7%)
Japan govt maintains view: machinery orders showing signs of pickup
Japan Aug machine orders m/m rise led by rebounds in orders from non-ferrous metals producers, telecom services, wholesale/retail industry
Market Consensus Before Announcement
Japan’s core machinery orders are expected to rebound on the month in August, backed by signals of strong domestic machine tool orders. The general uptrend in machinery orders is seen staying in place amid solid capital investment plans and firm global demand related to artificial intelligence, prompting orders for semiconductor manufacturing equipment and other AI-related items.
August machinery orders, a key leading indicator of business investment in equipment and software, are forecast to rise 3.4% on the month after falling 3.7% a month earlier.
In July, the decline was led by lower orders from nonferrous metal producers for nuclear power facilities and computers, computer and telecommunications equipment makers for motors and computers, and real estate firms, partly reflecting a payback after a surge in orders from those industries in the previous month.
Core machinery orders are expected to post double-digit annual growth for a third straight month in August, rising 15.3% from 11.2% in July. They rose 16.9% in June.
In July, the Cabinet Office maintained its assessment that machinery orders are “showing signs of a pickup” for a 10th straight month. The office projected in June that core orders would rise 4.9% on the quarter in the July-September period.
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.