FX.co ★ Japan Housing Starts Drop Less than Estimated

Japan’s housing starts fell 0.4% year-on-year in January 2026, easing from a 1.3% decline in the previous month and performing better than market expectations of a 1.6% drop. This marked the third consecutive month of contraction, but the mildest decline since July 2024. Rental housing starts continued to fall, though at a slower pace (-1.5% vs. -3.4% in December). In contrast, owner-occupied homes returned to growth (6.6% vs. -1.8%), as did prefabricated housing (5.1% vs. -6.1%). Starts of two-by-four homes also strengthened, with growth accelerating to 8.7% from 2.8%. Meanwhile, built-for-sale housing declined 4.8%, reversing a 1.9% increase in December.