Japan machine tool orders stay elevated in July

Foreign bookings jumped as Europe rebounds and North America’s aerospace boom continues.

Japan’s machine tool order book remained remarkably robust in July, with the sector notching its third-highest monthly total on record even as the customary summer slowdown set in.

Final figures released by the Japan Machine Tool Builders’ Association (JMTBA) showed total orders reaching JPY193.0b in July. 

Whilst this marked the first month-on-month decline in two months, orders rose year on year for the 13th consecutive month and topped JPY170b for the fifth month running. 

The July total was surpassed only by June’s JPY203.4b and March’s JPY193.5b — itself boosted by fiscal year-end demand — meaning orders held close to that peak even during a period when trade typically cools. The association said this underlined the view that capital investment remains firmly in an expansion phase.

Overseas orders told a similarly striking story. Foreign bookings totaled JPY139.8b, with year-on-year growth topping 50% for the second month in a row. Although orders eased slightly from June, the total still ranked as the third-highest on record — matching the overall order tally’s own ranking.

The regional breakdown pointed to broad-based strength. North America continued to post large aerospace orders alongside solid demand from job shops and the energy sector, with bookings exceeding JPY40b for the second consecutive month.

In Europe, a easing of Germany’s previously stalled administrative procedures unlocked pent-up capital spending, pushing German orders above JPY4b for the first time in three months; gains elsewhere on the continent helped push European orders as a whole past JPY20b, also a three-month high.

Asia, meanwhile, retreated slightly from June’s record but held at roughly JPY75b — broadly consistent with the March-to-May range. Demand stayed firm in China and India, whilst orders also picked up in South Korea, Taiwan and South-East Asia.