Japan Composite PMI Revised Higher

Japan’s S&P Global Composite PMI slipped to 52.9 in March from a final 53.9 in February, flash data showed. While marking a 12th straight month of expansion in private sector business, the latest result was the weakest pace since December. Both manufacturing output and services activity lost momentum, with new orders rising at the weakest rate in three months and export demand expanding only modestly. Employment growth eased to a four-month low, while capacity pressures persisted, though backlogs rose less sharply than February’s record pace. On inflation, input costs climbed at the fastest rate in nearly a year, linked to supply chain disruptions and higher energy prices from the Middle East conflict. Yet output price inflation softened to a three-month low. Finally, business sentiment fell to an 11-month low amid geopolitical uncertainty, driven by weaker expectations in the service sector, while manufacturers remained relatively optimistic.

Japan’s S&P Global Composite PMI rose to 53.9 in February 2026, slightly higher than the preliminary estimates of 53.8, and picking up from 53.1 in January, marking the fastest expansion in overall private sector activity since May 2023. Growth was supported by a solid gain in services activity alongside a notably quicker rise in manufacturing output. Overall new orders increased at the strongest pace in 33 months, while new export business expanded at the fastest rate in eight years, driven by stronger external demand for manufactured goods.Employment continued to rise at a solid but slightly slower pace, and backlogs of work accumulated amid rising workloads. Input costs climbed sharply, and selling prices increased to the greatest extent since May 2024 as firms passed on higher expenses to customers.

Japan’s S&P Global Composite PMI rose to 53.8 in February 2026 from a final 53.1 in the previous month, flash data showed. It marked the highest level since May 2023, driven by faster growth in both manufacturing output and services activity. Overall sales rose at the quickest pace in nearly three years, while new export orders expanded at the strongest rate in eight years, reflecting a sustained rebound in goods demand. Employment continued to increase at a solid pace, though slightly easing from January’s multi-year high. Backlogs of work accumulated at the fastest rate since composite records began in September 2007, underscoring capacity pressures. On the price front, both input costs and output charges rose at slightly faster rates. Looking ahead, business confidence reached a 15-month high, supported by new product launches, stronger tech demand, and the recent landslide election victory of the Takaichi administration.