Japan’s PMI Manufacturing index for June was finalized at 50.0, slightly down from May’s 50.4, indicating a stagnation in the sector. S&P Global highlighted a marginal increase in manufacturing production, but new orders continued to decline, albeit slightly. Employment in the sector expanded, with business confidence reaching a six-month high.
Pollyanna De Lima at S&P Global Market Intelligence stated, “Notably, the latest PMI data revealed the first rise in Japanese factory production for over a year, and a rebound in business confidence.”
However, she also pointed out significant challenges, including heightened cost pressures due to Yen depreciation, which increased the price of imported materials. Labor costs also strained budgets.
“There was clear evidence that the sharp rise in overall purchasing prices was not caused by supply-chain issues, as delivery times improved to the greatest extent in over 15 years,” she added.
Consequently, manufacturers raised their selling prices at the highest rate in over a year, a move seen as unfavorable given the weak domestic and external demand.
