FX.co ★ Japan Manufacturing PMI Revised Slightly Downward

In October 2025, the S&P Global Japan Manufacturing PMI saw a slight dip to 48.2, following a preliminary estimate of 48.3, and a decrease from 48.5 in September. This figure represents the most significant contraction since March 2024, highlighting the most severe decline in factory orders over the past 20 months. This downturn can be attributed to restricted client budgets, weak demand conditions, and negative export trends. Although foreign sales decreased, the rate of decline was the gentlest since March. Production levels also dropped due to tepid demand and a lack of new orders, particularly impacting sectors like automotive and semiconductors. The persistent reduction in customer demand led companies to reduce their input purchases, though the reduction rate slowed, while employment saw a slight increase. Regarding prices, input cost inflation rose to a four-month high, influenced by increased labor, material, and transportation costs, whereas output price inflation remained relatively stable. On a brighter note, business sentiment improved from September's five-month low.