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Japan PMI rises in August as manufacturing growth broadens

S&P Global said new orders and overseas demand accelerated at the fastest pace in more than eight and a half years, while input-price inflation eased to a five-month low.

Reported · Written up by our desk · Major Pairs

Japan’s private-sector expansion strengthened in August, with the PMI Composite Output index rising from 52.7 to 53.4, its fastest month-on-month increase in output since February, according to Action Forex.

The services component also improved, with PMI Services Business Activity moving from 51.2 to 52.3, while PMI Manufacturing climbed from 54.5 to 55.1. PMI Manufacturing Output stayed strong at 56.1, only slightly below July’s 56.3, with factories continuing to lead overall growth.

S&P Global reported sharp increases in production and new orders, and Action Forex highlighted that total sales and overseas demand rose at the fastest pace in more than eight and a half years. The report pointed to semiconductor and AI-related industries as key sources of new business.

Cost pressures eased slightly but remained elevated, with input-price inflation slowing to a five-month low. Output-price inflation stayed close to a record pace as firms remained reluctant to ease pricing while costs were still high, Action Forex said, keeping inflation risks relevant even as activity improved.

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