Japan’s total machinery orders fell -4.2% MoM in July 2025, continuing the weak Q2 trend and pointing to a sluggish start for Q3 investment activity.

• Core private-sector machinery orders (excluding ships and electric power) dropped -4.6% MoM (vs -1.7% MoM expected), erasing much of June’s 3.0% gain and underscoring softness in underlying domestic demand.

• Manufacturing orders rose 3.9% MoM, marking the first positive reading in three months, while non-manufacturing (ex-volatile) orders fell -3.9% MoM, reversing June’s 1.8% gain.

• Government orders jumped 21.3% MoM after a -11.9% decline in June, highlighting volatility in public-sector demand.

• Overseas orders declined -8.4% MoM, extending June’s -8.8% drop, and suggesting weaker foreign demand for Japanese capital goods.

• Orders through agencies rose 5.1% MoM in July, following +6.0% in June, providing some stability within distribution channels.

• On a quarterly basis, total machinery orders were down -5.3% in Q2, but are forecast to rise 3.7% QoQ in Q3, with core private-sector orders expected to fall -4.0% QoQ, signaling a possible divergence between headline and underlying demand.