FX.co ★ Japan Composite PMI Hits 17-Month High

Japan's S&P Global Composite PMI climbed to 52.8 in January 2026, up from 51.1 in December, achieving its highest level since August 2024, according to preliminary data. This signifies the 11th consecutive month of growth in the private sector, bolstered by a notable increase in services activity, the most substantial since July, and a modest rise in manufacturing output for the first time in seven months. New orders progressed at the briskest rate since May 2024, coupled with foreign demand expanding for the first time since March. Backlogs experienced their steepest increase since the series began in 2007, indicating mounting capacity pressures. Employment levels rose at their strongest rate since April 2019. While input price inflation eased somewhat from December’s eight-month peak, it continued to remain high, with output prices seeing the sharpest rise in 20 months. However, sentiment declined to its lowest point since October, affected by escalating costs, global uncertainties, labor shortages, and demographic issues, though overall optimism stayed generally in line with the survey’s long-term average.