The S&P Global Japan Manufacturing PMI was revised down to 54.9 in August 2026 from a preliminary estimate of 55.1, following a final reading of 54.5 in July. This marked the eighth consecutive month of expansion in factory activity. Despite the slight downward revision, the August figure still represented the strongest growth in the manufacturing sector since April and the second-fastest pace of expansion since January 2022, supported by the sharpest rise in new export orders since January 2018.
Employment increased solidly, posting its fastest gain since February 2028. Purchasing activity also expanded at its quickest rate since April 2022, while suppliers’ delivery times lengthened further, partly reflecting supply chain disruptions linked to the war in the Middle East.
On the cost side, input prices rose, driven by higher raw material and oil costs and a weaker yen. In turn, firms continued to pass these higher costs on to customers, with output prices increasing sharply. Finally, business sentiment strengthened to a six-month high, underpinned by expectations of stronger sales ahead.
