–February Machinery Orders Seen Flat on Month After Smaller-Than-Expected Drop in January; BOJ Tankan Showed Solid Capex Plans in Fiscal 2026
By Max Sato
(MaceNews) – Here are the key Japanese events for the coming week.
The data calendar is light two weeks ahead of the Bank of Japan meeting on April 27-28 at which the board will decide whether the bank needs to raise interest rates at this point after the Middle East conflict has boosted global energy and commodities prices.
Board members continue weighing upside risks to inflation against downside risks to growth following a quarterly meeting of BOJ branch managers on April 6. All nine regions maintained their assessment that their respective economies had been either “recovering moderately,” “picking up,” or “picking up moderately,” the Sakura Report on Japan’s regional economies showed.
Heightened tensions in the Middle East prompted some regions to report that the spike in crude oil prices and disruptions in logistics had pushed up procurement costs and reduced operating rates due to constraints on supply of raw materials.
Looking ahead, the BOJ report said, amid growing uncertainty, concerns have been raised over rising costs for energy among others and their negative impact on corporate earnings and personal consumption as well as the potential for supply constraints to spread throughout the entire supply chain.
Among the official data released last week, the Cabinet Office’s Economy Watchers’ Survey for March showed higher energy and commodities prices triggered by the Mideast conflict damped sentiment in many aspects of economic activity.
The Watchers’ sentiment index indicates the direction of Japan’s current economic climate plunged 6.7 points to a four-year low of 42.2 in March on a seasonally adjusted basis. It was the lowest since 37.7 in February 2022 when Russia invaded Ukraine. It followed a 1.3-point rise to a nearly two-year high of 48.9 in February. The index has stayed under the key 50 line for two years. It was last above the neutral line in March 2024 (50.1).
The Watchers’ outlook index, which projects sentiment in two to three months, plummeted 11.3 points to 38.7, the lowest since 37.7 in December 2020 when the economy was reeling under the drag form the pandemic. It followed a slight dip to 50.0 in February after rising to 50.1 in January from 49.5 in December. The index surged to 52.2 in October 2025 from 48.4 in September, returning to positive territory for the first time since August 2024 (50.2).
Monday, April 13
1515 JST (0615 GMT/0215 EDT Monday, April 13) Bank of Japan Deputy Governor Ryozo Himino reads out a brief speech by Governor Kazuo Ueda at an annual meeting of the Trust Companies Association of Japan. It is expected to cover the bank’s latest view on the economic and financial conditions and what risks board members are closely monitoring.
Wednesday, April 15
0850 JST (2350 GMT/1950 EDT Tuesday, April 14) The Cabinet Office releases February machinery orders.
Mace News median: core orders -0.1% m/m (range: -2.0% to +3.9%) vs. Jan -5.5%; +12.0% y/y (range: +7.5% to +14.0%) vs. Jan +13.7%
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to be flat, down 0.1% on the month in February, after posting a smaller-than-expected 5.5% drop in January when service providers continued placing orders for computers to ease widespread labor shortages with automation and digitization.
The BOJ’s quarterly Tankan survey for the March quarter released on April 1 showed solid capital investment plans for fiscal 2026 that began this month despite concerns about the drag from the Mideast conflict.
Last month, the Cabinet Office maintained its assessment that machinery orders were “showing signs of a pickup” despite the drop in January orders because they were basically in payback for large orders placed in December and core orders’ three-month moving average slipped just 0.1% in January after rising a revised 3.8% previously.
From a year earlier, core orders excluding those from electric utilities and for ships are projected to rise 12.0% after climbing 13.7% the previous month.