These are some of the tools and materials used to produce animation in Japan. I have listed Japanese yen prices and the availability in Tokyo but I do not know the prices or availability of these products elsewhere. Please consult your local art supply store or search online.
Further installments of this series will describe the tools used to create cels, backgrounds, manga and others.

Pencil
The basic artist's tool. The most commonly used pencil in the anime industry is the Mitsubishi Uni (140 yen). Although it is available in a wide variety of pressure-proof, high density lead hardnesses, the most common is the 2B then 3B then B. The 2B is good because the soft lead enables the artist to get more varying line width, thus more dynamic lines, from a single pencil. In order for the trace machine to get a clean transfer from the animation paper to a cel high density black lines are necessary and the 2B and 3B provide the best type of lines. 4B and softer pencils are much more difficult to control and smudge easily. B pencils are used for drawing key animation, which is rougher than the cleaned-up inbetweens and does not need to be put through the trace machine. The Uni pencil is available at most stationery and art stores and is most commonly purchased in boxes of a dozen.

Pencil Lead Holder

Wooden pencils are used almost exclusively because it is a lot easier to control the line width than trying to use a .05mm mechanical pencils (called "sharp" pencils in Japan). There is almost no way to get really dynamic lines from a .05mm pencil but a few animators, the ones who use very thin lines and do a lot of little details, prefer them. I use a lead holder so I get the same size and density leads but I don't have to worry about the thing always changing size in my hand.

Erasers
The most commonly used eraser is the Mono block eraser. These are available at many stores including local convenience stores. The erasers that come with the aforementioned boxes of Uni pencils are probably the best pencil erasers available but they are not sold separately. They usually end up being taken over by the animators with more seniority thus, as an animator progresses he gets better erasers.

Eraser shield Electric eraser

Kneaded erasers are used as well but not as often as the block erasers. Most animators use an eraser shield which allows them to isolate certain parts of the lines to erase.
I have an electric eraser that I use for small areas but I've never seen anyone else use one here.
When I first moved to Japan and I ate octopus for the first time I thought that it tasted just like erasers but it doesn't erase very well. It just leaves gooey stains on the paper.

Colored Pencils
Colored pencil lines are used to define trace lines, or self-trace lines, the lines that delineate shadows or any other line that will be traced in a color other than the color of the base animation lines which are usually black. (Sometimes dark brown is used to give the characters a softer look. This is used only in movies as the brown carbons for the trace machine are more expensive.)

Colored Pencils

The industry standard colored pencil is the Mitsubishi 880 series (80 yen). It is available in many colors but animators use only a narrow range of colors. The colors depend on the type of coloring system that the studio is using. For the heat trace machine and cels the colors used are: vermilion (#16 - shuiro), orange (#4 - daidaiiro), yellow green (#5 - kimidori), light blue (#8 - mizuiro), and sometimes yellow (#2 - kiiro). None of these colors is dense enough to transfer as a black line in the trace machine. Yellow is only used to indicate highlights and some companies use it while others ban it. Pink is rarely used in animation drawings although it does not transfer.

Darker pencils

If the studio is using a digital coloring system like Animo, the best pencils are the darker ones as they scan as black lines and the painter can still easily see which lines are meant to be trace lines. The most common colors for this are: dark green (#7 - fukamidori), dark blue (#10 - aoiro), purple (#18 - murasaki) and brown (#21 - chairo).
What the particular colors are used for depends on the individual studios. Most studios use vermilion for the first skin shadow and orange for the second (darker) level but some use them in the opposite order. Yellow green often indicates an area that will be painted black and as previously mentioned yellow almost always defines a highlight. The area that will be in shadow, or the darker color, will usually be colored in lightly with a pencil. Some animators want the color of the lines and fill to be the same but some prefer to have the colors different which makes it easier to see the shadow lines when checking the movement of the animation. Most companies are pretty strict about what colors are used for what purposes. I've watched animators actually get into fights about this!
In the States I would use the Berol Prismacolor pencils and their #935 is the best black pencil for sketching made anywhere.