Japan Manufacturing PMI Hits Near 4-Year High

The S&P Global Japan Manufacturing PMI rose to 53 in February 2026 from 51.5 in January, above the initial estimate of 52.8, as companies signaled a stronger recovery in business conditions, with output, new orders, and employment growth all accelerating since January. This marked the strongest manufacturing expansion since May 2022. Output grew at a solid pace, the fastest in just over four years, with firms often citing rising new business as a key driver. Total new orders also expanded robustly, the fastest since January 2022. Employment across Japan’s manufacturing sector increased further in February, extending the current streak of job creation to 15 months. Meanwhile, higher costs for raw materials, labor, and transport pushed average input costs higher during the month. Looking ahead, the 12-month outlook rebounded to its highest level since June 2024, with firms optimistic that improved global demand and new product launches will continue to support growth.

The S&P Global Japan Manufacturing PMI rose to 52.8 in February 2026 from 51.5 in January, marking the strongest expansion since May 2022, supported by firm domestic and external demand. Key sub-indexes for factory output and new orders both extended their uptrends in February, with firms frequently citing solid underlying demand and the favorable impact of new product launches. Robust overseas demand drove the fastest increase in new export orders in eight years. While the pace of job creation eased from January’s multi-year high, employment growth remained solid overall. Meanwhile, price data showed a slightly sharper rise in average input costs across Japan’s private sector in February. Looking ahead, Japanese manufacturers expressed greater optimism about the 12-month business outlook, anticipating that firmer demand conditions, rising demand for semiconductors and AI-related technologies, and continued product rollouts will underpin further expansion.

The S&P Global Japan Manufacturing PMI stood at 51.5 in January 2026, unchanged from the preliminary reading and up from December’s final figure of 50. This marked the first expansion in factory activity since last June, with the pace of improvement the strongest since August 2022, supported by the first upturn in new orders since May 2023 and to the greatest extent in nearly four years. Foreign sales rose for the first time since February 2022. Output growth was the strongest since April 2022, while employment rose at the fastest rate in 40 months. Purchasing activity increased at the fastest pace in three-and-a-half years, while vendor performance deteriorated. On the price front, input costs accelerated to their highest level in nearly a year, driven by higher raw material and labor costs amid a weak yen. Output price inflation rose at the fastest pace in over a year and a half. Finally, business sentiment weakened to a three-month low amid concerns over inflation.