FX.co ★ Japan’s Construction Orders Slump Eases Sharply in August, Year-on-Year Decline Narrows

Japan’s construction sector showed signs of stabilisation in August 2026, as the pace of decline in construction orders slowed markedly on a year-over-year basis. According to data updated on 30 September 2026, construction orders fell 3.6% in August compared with the same month a year earlier, a substantial improvement from July’s 13.4% year-on-year drop.

The figures indicate that while the industry remains in contraction, the intensity of the downturn has eased. July 2026 had marked a particularly weak point, with orders shrinking at a double‑digit rate versus July 2025. August’s softer decline suggests that the sector may be moving away from the sharp pullback seen earlier in the summer.

On a year-over-year comparison, the “previous” indicator captures July 2026 orders versus July 2025, while the “actual” August reading reflects orders relative to August 2025. The shift from a 13.4% fall in July to a 3.6% decline in August highlights a notable moderation in the sector’s weakness, which market participants will be watching closely for signs of a potential turning point in Japan’s construction activity.