FX.co ★ Japan Manufacturing PMI Revised Slightly Upward

The S&P Global Japan Manufacturing PMI was modestly adjusted upwards to 48.9 in July 2025, compared to the preliminary figure of 48.8, yet fell below June's final measurement of 50.1. This contraction in manufacturing activity can be attributed to a renewed downturn in production due to ongoing uncertainty surrounding US tariff policies and muted demand. Although new orders continued to decline, the rate of contraction showed a slight improvement. Export orders decreased as well, though at the slowest rate seen in four months. Purchasing activity contracted at the most rapid pace since February 2024, while supplier performance saw a slight deterioration. Employment saw an increase, fueled by expectations of heightened demand in the forthcoming months, despite a reduction in work backlogs. Regarding pricing, input cost inflation dropped to its lowest level in four and a half years, whereas output cost inflation surged to its highest rate in a year. Business sentiment, meanwhile, reached a six-month high, boosted by optimism for better demand conditions ahead.