Japan Manufacturing PMI Revised Slightly Lower

The S&P Global Japan Manufacturing PMI inched down to 54.7 in July 2026 from 54.8 in the previous month, but surpassed market expectations of 54.5, preliminary estimates showed. It was the seventh straight month of expansion in factory activity, supported by faster increases in output, while new orders grew at the fastest pace in over five years. Meanwhile, employment increased at a faster pace. Purchasing activity rose at the fastest pace in more than four years, feeding through to higher stocks of purchases amid ongoing supply chain disruption and higher prices linked to the conflict. Stocks of finished goods also rose, marking the first increase in two years. On the price front, input price inflation eased, while output price inflation slowed to a three-month low. Finally, business sentiment improved to its highest level in four months, supported by hopes of new product launches and stronger demand, notably in the AI and semiconductor industries.

The S&P Global Japan Manufacturing PMI was revised slightly lower to 54.8 in June 2026 from 54.9 in the preliminary estimate, but remained above May's reading of 54.5 and close to April's 55.1, which marked the strongest expansion since January 2022. It was the sixth straight month of growth in factory activity, supported by faster increases in output and new orders. Output growth was the second-fastest since January 2022. New orders grew at their fastest rate since January 2022, partly driven by client stock-building amid ongoing supply disruptions and concerns over future price increases related to the Middle East conflict. Meanwhile, employment increased at the fastest pace in more than eight years. On the price front, input cost inflation was unchanged from May's 44-month high, driven by higher energy, fuel, and raw material costs, while output price inflation eased. Finally, business sentiment remained below the historical trend amid concerns over the Middle East conflict.

The S&P Global Japan Manufacturing PMI increased to 54.9 in June 2026, above both May's reading and market expectations of 54.5 and close to April's 55.1, which marked the strongest expansion since January 2022, preliminary estimates showed. It was the sixth straight month of growth in factory activity, supported by faster growth in output and new orders. Output growth was the second-quickest since January 2022. New orders grew at a faster pace, with sales rising at their fastest rate since January 2022, partly driven by client stock-building amid ongoing supply disruptions and concerns over future price increases related to the Middle East conflict, while foreign sales rose at a slightly slower pace. Meanwhile, employment increased at the steepest pace in more than eight years. On prices, input and output inflation eased but remained near their highest levels since late 2022, boosted by higher energy, fuel, and raw material costs. Meanwhile, sentiment remained in positive territory.