Japan’s S&P Global Composite PMI rose to 53.8 in February 2026, up from a final 53.1 in January, according to flash estimates. This was the highest reading since May 2023, underpinned by stronger growth in both manufacturing output and services activity. Overall sales increased at the fastest pace in nearly three years, while new export orders expanded at the quickest rate in eight years, signaling a sustained recovery in external demand for goods.
Employment continued to rise at a solid rate, though the pace eased slightly from January’s multi‑year high. Backlogs of work built up at the sharpest rate since composite data began in September 2007, highlighting mounting capacity constraints. On the price front, both input costs and output charges increased at a marginally faster pace.
Looking ahead, business confidence climbed to a 15‑month high, supported by new product launches, firmer demand in the technology sector, and the recent landslide election victory of the Takaichi administration.
