Japan’s May 2025 machine tool orders remain above JPY 120 bn despite tariff concerns

June 12, 2025

U.S. trade policy shows no clear impact on demand at this stage

The Japan Machine Tool Builders’ Association (JMTBA) has released the preliminary report on Japan’s machine tool orders for May 2025. Total orders reached JPY 128.7 billion, down 1.2% from the previous month. While this marked the second consecutive month of month-on-month (MoM) decline, the total remained above the JPY 120 billion level, and year-on-year (YoY) orders increased for the eighth consecutive month.

In recent months, concerns have been growing that U.S. tariff measures could suppress capital investment. However, as of May, there have been no clear signs of impact on either domestic or foreign demand.

Domestic orders continue modest trend

Domestic orders totaled JPY 33.0 billion, down 4.0% MoM. This marks the second consecutive month of MoM and YoY decline. Excluding the March peak caused by fiscal year-end demand, the current figure aligns with this year’s average. While underlying strength remains weak, the market shows signs of stability, and a gradual recovery is expected in the second half of the year.

Solid performance in overseas markets

Foreign orders came to JPY 95.7 billion, a slight decrease of 1.0% MoM. This also marked the second straight month of MoM decline. However, YoY results showed growth for the eighth consecutive month. Orders exceeded JPY 95 billion for the second month in a row, indicating continued solid performance despite growing uncertainty in the global economy.

Further details will be provided in the final report.