FX.co ★ Japan Manufacturing PMI Revised Upward

In May 2025, the au Jibun Bank Japan Manufacturing PMI saw an upward revision to 49.4, improving from the preliminary 49.0 and up from 48.7 in April. This marks the eleventh consecutive month of contraction; however, it is the smallest decline since last December as the downturn in new orders softened, though output still experienced a slight reduction. Overall, new business saw a modest decrease attributed to weak demand, while foreign sales were tempered amidst US-imposed tariffs. Consequently, output faced a modest contraction, despite a slight improvement over April. Employment levels rose at the fastest pace since April 2024, although the reduction in work backlogs slowed. The rate of purchasing activity decline became milder, and supplier performance saw slight deterioration due to material and labor shortages causing marginal delays. Regarding prices, input cost inflation dropped to its lowest point in 14 months, and output price inflation fell to a nearly four-year low. Business sentiment improved from April's nearly five-year low.