FX.co ★ Japan Machinery Orders Drop Sharply in July

Japan's core machinery orders, which exclude unpredictable sectors like ships and electric power, declined by 4.6% month-on-month to ¥898 billion in July 2025. This downturn follows a 3% rise in June and significantly exceeds the anticipated 1.7% decrease. The fall was primarily driven by the non-manufacturing sector, which decreased by 3.9% to ¥501.1 billion, although manufacturing orders increased by 3.9% to ¥428.4 billion. Among various industries, the most substantial declines were observed in non-ferrous metals (-53.5%), real estate (-44%), mining and quarrying (-21.2%), and finance and insurance (-16.7%). On an annual basis, private-sector orders grew by 4.9%, down from June's 7.6% growth and below the projected 5.4%. Core machinery orders are regarded as an essential yet volatile leading indicator of capital investment trends over the subsequent six to nine months.