Japan Manufacturing PMI Hits 3-Month Low

The S&P Global Japan Manufacturing PMI fell to 51.4 in March 2026 from a near four-year high of 53.0 in the previous month, below market expectations of 52.8, according to flash estimates. It marked the lowest reading since December 2025, as new order growth slowed notably, with total new export business expanding at the weakest pace recorded in the current three-month expansion period. Meanwhile, manufacturers increased their staffing levels in March, albeit at a slower pace. On the price front, input cost inflation rose to its highest level in nearly a year, partly driven by the Middle East conflict and its impact on supply chains and energy prices. However, output prices increased at the slowest pace in three months. Finally, Japanese manufacturers remained optimistic about the year-ahead outlook, although confidence fell to an eleven-month low amid rising uncertainty related to the Middle East conflict.

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.