Japan’s machine tool exports surge as foreign orders hit 77.6% share

Domestic market remains flat whilst overseas buyers drive orders to second-highest level on record.

Japanese machine tool orders reached ¥145.5bn (£750m) in January 2026, rising 25.3% year on year despite an 8.2% decline from the previous month, according to preliminary figures from the Japan Machine Tool Builders' Association.

The month-on-month drop, attributed to seasonal factors, marked the first decline in two months. However, annual growth continued for the seventh consecutive month, with total orders exceeding ¥140bn for the second month running, suggesting that the momentum in capital investment — particularly from abroad — has carried into the new year.

Foreign orders dominated the January figures, totaling ¥112.9bn, down 4.9% month on month but up a substantial 34.2% year on year. The export performance represented the second-highest level on record, pushing the foreign demand ratio to 77.6% — a new all-time high.

By contrast, domestic orders totalled just ¥32.6bn, falling 18.2% from December and rising a modest 2.0% annually. The figures slipped below ¥35bn for the first time in two months, continuing what the association described as a "sideways trend" in the home market.

Whilst month-on-month foreign orders declined slightly, the association noted that the overseas market sustained "extremely high levels" following December 2025's record-breaking performance.

Regional and industry breakdowns will be provided in the final report. Machine tool orders are closely watched as an early indicator of manufacturing investment trends.