BofA Japan FA Indicator: remains steady at elevated levels

Research evidence excerpt

BofA Japan FA Indicator: remains steady at elevated levels

Accessible version

Global Industrials

BofA Japan FA Indicator: remains steady at

elevated levels

Industry Overview

22 June 2026

Indicator remains steady at high levels Equity

The BofA Japan Factory Automation (FA) Indicator, which leads the Japan Machine Tool Global

Orders (JMTO) cycle by roughly three months, trended sideways, marking the third Capital Goods

month of flattish trends, albeit at relatively elevated levels. This suggests continued

strength in JMTO over the next few months, keeping us constructive on the FA cycle.

Breadth of positive leading inputs narrow

In the latest data, the number of positive leading inputs declined to three from four, with

our input for Japan Industrials Earnings Revisions turning negative. On the other hand,

our inputs for the Global PMI and US Monetary Base shifted from being negative to

neutral, leading to a decline in negative leading inputs to three from four.

Kenjin Hotta >>

Cycle transitioning from early cycle to mid-cycle phase? ResearchBofAS JapanAnalyst

Our latest read suggests that the cycle may be shifting from early-cycle acceleration to +81 3 6225 7786

kenjin.hotta@bofa.com

a more “steady” mid-cycle phase. From here, the key question is whether this mid-cycle

proves short—amid tougher YoY comps (Sept/Oct) and eventually turning negative—or VivekData ScienceVasudeoRsch Analyst

whether growth moderates but stays positive for longer. Given ongoing capacity MLI (UK)

+44 20 7995-3511

expansion tied to data centers, we lean toward the latter for now. vivek.vasudeo@bofa.com

Yuri Nishizaki >>

Exhibit 2: The indicator remains steady Research Analyst

BofA Japan FA Indicator vs. Japan machine tool orders (YoY%) BofAS Japan

yuri.nishizaki@bofa.com