Japan’s factory activity contracts amid rising costs – PMI

Japan’s manufacturing sector experienced a slight contraction in July to 49.2 compared to 50.0 in June, according to the au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI).

Output and new orders declined during the month, while input costs surged to their highest level since April 2023.

Although output prices eased slightly, manufacturers continue to grapple with inflationary pressures. The weakening yen has exacerbated these challenges by driving up the cost of raw material imports.

The au Jibun Bank flash services PMI jumped to 53.9 in July from 49.4 in June, marking a three-month high. New business surged, and backlogs of work reached their highest level since March.

The combined manufacturing and service sector activity, as measured by the au Jibun Bank flash Japan composite PMI, rose to 52.6 in July from 49.7 in June.

Attribution: Reuters