Commentary Directory

Japan Machinery Orders: August 2023

Jacob Hess
October 11, 2023

Japan Machinery Orders

10/11/2023 (August 2023)

-14.0% MoM

Below Expectations

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Orders (ex-Volatile Orders) -0.5 MoM
Manufacturing +2.2% MoM
Non-Manufacturing -3.8% MoM

The recent Japan machinery orders report for August 2023 has unveiled further volatility in the industrial sector Overall, total machinery orders in August experienced a significant drop of -14.0% MoM, following an impressive 9.8% MoM growth in July. When it comes to the private sector, there was a steep decline of -23.7% MoM in August, a contrast from the substantial 26.6% MoM surge seen in July. However, the data excluding volatile orders showed only a moderate dip of -0.5% MoM in August. Forecasted figures for the Jul-Sep quarter present a somewhat bleak picture with the total orders anticipated to decrease by -2.8% QoQ.


There looks to be some volatility in machinery order data as a result of larger projects boosting July data, but the smoothed out trend over the quarter looks to be clearly negative as the quarterly forecast at the headline level and non-volatile level are at -2.8% QoQ and -2.6% QoQ respectively. It looks like the bloat of government orders in the first two quarters has been dissipated in the third quarter, and private demand has been left for dead. The bleak outlook points a weak Q3 growth picture.