Japan Machinery Orders Drop Sharply in July

Japan’s core machinery orders—which exclude volatile sectors such as ships and electric power—fell 4.6% month-over-month to ¥898 billion in July 2025, reversing a 3% increase in June and coming in well below expectations for a 1.7% decline. The drop was led by the non-manufacturing sector, which slipped 3.9% to ¥501.1 billion, while manufacturing orders rose 3.9% to ¥428.4 billion. By industry, the steepest contractions were recorded in non-ferrous metals (-53.5%), real estate (-44%), mining and quarrying (-21.2%) and finance and insurance (-16.7%). Year-on-year, private-sector orders rose 4.9%, easing from June’s 7.6% growth and missing forecasts of 5.4%. Core machinery orders are seen as a key yet volatile leading indicator of capital expenditure over the coming six to nine months.