Japanese machine tool market holds steady with ¥137b orders in November
Foreign demand remains robust as domestic market shows signs of potential recovery
Japan's machine tool orders totalled ¥137.0b in November 2025, marking the third consecutive month above ¥135b despite a modest monthly decline, according to the Japan Machine Tool Builders' Association (JMTBA).
Whilst month-on-month orders fell for the first time in three months, year-on-year orders increased for the fifth consecutive month. The figures suggest the market has remained generally steady, with demand rising mainly due to foreign orders compared with mid-year levels.
Sluggish domestic demand
Domestic orders totalled ¥31.9b, down 10.4% month-on-month. This marked the second consecutive monthly decline and the first drop below ¥35b in three months. Year-on-year domestic orders also declined for the first time in three months, and overall domestic demand remained sluggish.
By industry, all major sectors declined on a monthly basis. However, orders from the aircraft, shipbuilding and transport equipment sector exceeded ¥30b for the first time in two months and grew to more than three times the year-on-year level.
Whilst domestic demand continues to lack momentum overall, expectations are rising for the effects of policy measures such as the new government's “17 strategic investment fields.” A gradual improvement is anticipated, with a more positive stance towards capital investment emerging amongst manufacturers.
Strong foreign orders
Foreign orders totalled ¥105.0b, down 2.5% month-on-month. Although this was the first monthly decline in three months, foreign orders exceeded ¥100b for the second consecutive month, marking the fourth-highest level on record. Year-on-year growth continued for the 14th consecutive month.
Across the three major regions, orders remained generally firm, indicating continued improvement in global demand for Japanese machine tools.
Solid demand in Asia
Asia recorded ¥54.3b in orders, with solid demand maintained in China and India. The region accounted for more than half of total foreign orders, underscoring its importance to Japanese machine tool manufacturers.
European recovery
Europe posted ¥18.1b in orders, supported by recovery in Germany and Italy. Year-on-year growth continued for the fifth consecutive month, suggesting a sustained improvement in the region's manufacturing sector.
North American market
North America recorded ¥29.4b in orders. Although some large orders related to aircraft and automotive industries fell away, overall order levels in the region remained high, reflecting robust underlying demand.
Meanwhile, sectors showed a mixed performance, with the domestic market showing divergent trends across sectors:
- Industrial machinery: ¥13.0b (down 10.3% month-on-month, down 19.4% year on year)
- Motor vehicles: ¥8.2b (up 16.2% month on month, up 20.5% year on year)
- Electrical and precision machinery**: ¥3.5b (down 11.8% month on month, down 14.1% year on year)
- Aircraft, shipbuilding and transport equipment**: ¥3.2b (up 74.2% month on month, up 204.3% year on year)
The standout performance came from the aircraft, shipbuilding and transport equipment sector, which more than tripled its year-on-year orders, suggesting renewed investment in these capital-intensive industries.
Outlook: cautious optimism for 2026
The November figures paint a picture of a market maintaining steady momentum despite some monthly volatility. Foreign demand continues to underpin the sector's performance, with all three major regions showing resilience.
The domestic market remains the weak point, but emerging policy support and improving business confidence suggest conditions may gradually improve in early 2026. The government's strategic investment initiative could provide the catalyst for a sustained recovery in domestic orders.
For Japanese machine tool manufacturers, the challenge will be sustaining foreign demand whilst nurturing a recovery in the domestic market to create a more balanced order book as the industry moves into the new year.
