Nikkei 225 Rebounded After Fed's Rate Cut, Japan's Core Machinery Orders Dropped Sharply In July

Akira Ito
18 Sep, 2025
Tokyo

Japan's key indexes rebounded from the previous session after the U.S. Federal Reserve delivered a quarter-point rate cut as widely anticipated. 

The Nikkei 225 Stock Average increased 1.3%, and the broader Topix gained 0.5% ahead of the Bank of Japan's policy decision on Friday. 

The U.S. Federal Reserve cut its fed funds rate range by 25 basis points to between 4.0% and 4.25% and signaled possible additional rate cuts totaling 50 basis points in 2025. 

The central bank revised its 2025 GDP growth estimate to 1.6% from 1.4% but held its jobless rate estimate at 4.5%, PCE inflation at 3.0%, and core PCE rate at 3.1% compared to its previous estimate released in June. 

Closer to home, the Bank of Japan is widely anticipated to hold its short-term rate at 0.5% on Friday as policymakers assess the impact of U.S. tariffs on the export-driven Japanese economy.

 

Volatile Core Machinery Orders Dropped Sharply in June 

Japan's core machine orders declined in July from the previous month, led by the non-manufacturing sector, the Cabinet Office reported Thursday. 

Core machinery orders, which exclude large and infrequent orders for ships and power plants, fell 4.6% in July to ¥898 billion yen, reversing a 3% increase in June.

Core machine orders are seen as a leading indicator of the capital spending over the next six to nine months.

The drop was led by the non-manufacturing sector, which decreased 3.9% to ¥501.1 billion, while manufacturing orders advanced 3.9% to ¥428.4 billion.

On an annual basis, core machinery orders rose at a slower pace of 4.9% compared to the 7.6% rise in June.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average soared 1.3% to 45,379.37, and the broader Topix advanced 0.5% to 3,161.28. 

Technology stocks led gainers in Tokyo on Thursday, following the U.S. rate cut. 

SoftBank Group Corp. increased 2.2% to ¥18,445.0, Tokyo Electron advanced 5.7% to ¥25,620.0, and Lasertec gained 3% to ¥17,225.0. 

Sumitomo Mitsui Financial Group increased 0.6% to ¥4,074.0, Mitsubishi UFJ Financial added 0.3% to ¥2,286.50, and Mizuho Financial Group inched lower 0.04% to ¥4,774.0.