Japan Composite PMI Stays at 4-Month High

The S&P Japan Composite PMI held steady at 51.5 in July 2025, unchanged from June’s final reading, flash data showed. This was the fourth straight month of private sector growth, maintaining the strongest pace of increase since February. Growth continued to be driven by a faster rise in services activity, which offset a renewed fall in manufacturing output. New exports rose marginally but at the fastest pace in three months, led by continued growth in services despite further falls in factory orders. Export sales fell the most in nine months, with manufacturers posting a steeper drop than service firms. Employment grew slightly, the weakest pace in 18 months, as firms grew more cautious. Input cost inflation hit a four-year low but remained elevated due to high labor, fuel, and material costs. Output price inflation also eased. Finally, confidence slipped to its second-lowest since August 2020 amid concerns over U.S. tariffs, weak demand, labor shortages, and demographic challenges.