Japan’s Machinery Orders Decline in January Following December Surge

Tokyo, Japan – Japan’s core machinery orders decreased by 5.5% in January 2026, following a substantial 16.1% increase in December, according to data released by the Cabinet Office on Thursday. The January figure reached ¥982.4 billion.

Key Findings

The core machinery orders, which exclude volatile orders for ships and power-generation equipment, serve as a crucial indicator of business investment. Despite the monthly decline, the government maintained its assessment that machinery orders are showing signs of picking up.

Sectoral Breakdown

Machinery orders from manufacturers experienced a significant drop of 12.5% in January, totaling ¥435.8 billion. This followed a surge in the previous month driven by large orders in the nonferrous metal and oil & coal industries. Conversely, core orders from non-manufacturers rose by 6.8% to ¥563.2 billion, fueled by demand for computers and road vehicles.

Total Orders and Forecast Concerns

Total machinery orders, encompassing public and foreign sectors, declined by 2.0% to ¥3,942.1 billion. Analysts express concerns that ongoing geopolitical tensions, specifically the conflict in Iran, could dampen business sentiment and potentially lead to a reduction in capital spending. Takeshi Minami of Norinchukin Research Institute cautioned that a prolonged conflict could “shrink appetite for capital spending.”

Background

The Economic and Social Research Institute (ESRI) is responsible for compiling and publishing the machinery orders data. The institute, located in Tokyo, can be contacted at +81-3-5253-2111. More information about the survey and its methodology can be found on the ESRI website.

Recent Trends

Recent data reveals a pattern of fluctuation in Japan’s machinery orders:

• December 2025: Core machine orders rose 19% from the previous month. (Japan Times)
• November 2025: Core machine orders fell by 11%

Historical data and detailed breakdowns by sector and machinery classification are available on the ESRI website. View historical data.