The S&P Global Japan Manufacturing PMI slipped to 54.1 in September 2026 from 54.9 in August, falling short of market expectations for 55.0. Even so, the index signaled a ninth straight month of expansion in factory activity, according to preliminary estimates. It also indicated the slowest pace of growth in the manufacturing sector since February, as firms reported more moderate increases in both output and new orders.
Output growth eased to a three-month low, with sales rising at their weakest pace in four months. This deceleration occurred despite another strong rise in export demand, where the rate of increase in foreign sales matched August’s eight-and-a-half-year high.
On the supply side, delivery times continued to lengthen amid reports of ongoing supplier shortages. Purchasing activity softened, input inventories edged higher, and employment kept growing.
Price pressures remained elevated, with both input and output prices rising. This was attributed to higher energy and raw material costs, alongside the impact of a weaker yen. Finally, business sentiment improved, supported by expectations of sustained demand.
