Japan Manufacturing PMI Confirmed at Lower Level

The S&P Global Japan Manufacturing PMI was confirmed at 54.5 in May 2026, matching the preliminary estimate and following a reading of 55.1 in April, which was the highest since January 2022. However, the latest reading still signaled expansion, albeit at a slower pace, as output continued to rise. Production growth was partly supported by stockpiling efforts, as the war in the Middle East continued to impact product availability and drive up prices. However, total new order growth slowed slightly despite a stronger rise in foreign demand, with new export business increasing at the fastest pace in five years. Purchasing activity increased to guard against future shortages, while employment rose solidly. On prices, input price inflation accelerated to the fastest pace since September 2022 due to higher material prices, while selling prices rose at the quickest pace since October 2022. Finally, sentiment improved amid hopes of stronger consumer demand and new product development.
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