Japan’s core machinery orders fell 5.5% month-on-month to JPY 982.4 billion in January 2026, reversing a 16.1% surge in December but outperforming market expectations for a 9.6% decline. The drop was driven mainly by a 12.5% fall in manufacturing orders to JPY 435.8 billion, while non-manufacturing orders rose 6.8% to JPY 563.2 billion. By industry, the steepest declines were seen in petroleum & coal products (-75.9%), non-ferrous metals (-57.1%), other non-manufacturing (-43.5%), pulp, paper & paper products (-33.8%), and other manufacturing (-14.4%). On an annual basis, private-sector orders jumped 13.7% in January, easing from a 16.8% increase in December but exceeding forecasts for a 10.5% gain. Core machinery orders are widely viewed as a volatile yet key leading indicator of capital expenditure over the next six to nine months.