Japan’s core machinery orders — which exclude volatile categories such as ships and electric utilities — tumbled 12.4% month-on-month to JPY 962.0 billion in May 2026. The drop was far sharper than market expectations for a 4.2% decline and reversed an 8.7% increase in April. It marked the third monthly fall so far this year and the steepest decrease since December 2019, underscoring broad-based weakness in business investment.
Orders from manufacturers slumped 14.9%, following a 5.1% fall in April, while non-manufacturing orders declined 9.3%, after a 6.7% drop previously. Among manufacturers, the largest contractions were in shipbuilding (-80.5%), information and communication electronics (-23.6%), and business-oriented machinery (-14.3%). In the non-manufacturing sector, orders weakened most sharply in real estate (-69.3%), transport and postal services (-23.3%), and goods leasing (-18.6%).
On a year-on-year basis, core machinery orders fell 1.5%, swinging from a 15.6% surge in April and missing forecasts for a 12.9% increase. The result signaled the fastest annual decline in six months.
