FX.co ★ Japan Machinery Orders Unexpectedly Decline

In August 2025, Japan's core machinery orders, which exclude volatile sectors like ships and electric power, experienced a slight decline of 0.9% compared to the previous month, reaching ¥8,890 billion. This decrease followed a significant 4.6% drop in July and fell short of the anticipated 0.4% increase. The non-manufacturing sector led the decline, plummeting 6.4% to ¥469 billion, while manufacturing orders decreased by 2.4% to ¥418 billion. Industry-wise, the most substantial reductions were observed in goods leasing (-55.2%), chemicals and chemical products (-48.9%), pulp, paper, and paper products (-45.2%), other transport equipment (-38.2%), and other non-manufacturing (-21.1%). On a yearly basis, private-sector orders increased by 1.6% in August, a deceleration from July's 4.9% rise and significantly below the 4.8% forecast. Core machinery orders are regarded as a key, albeit volatile, leading indicator of capital expenditure for the forthcoming six to nine months.