Japan’s Manufacturing PMI was finalized at 48.7 in November, slightly above October’s 48.2, but still pointing to contraction. S&P Global’s Annabel Fiddes noted that conditions remained challenging, with firms reporting “another solid decline” in new business as demand stayed weak across both domestic and external markets..
Despite the soft order flow, sentiment improved meaningfully. Business confidence rose to the strongest level since the start of the year, supported by expectations that market conditions will begin stabilizing in 2026. That optimism translated into a further rise in employment, with firms hiring in anticipation of a longer-term recovery in activity.
A key focus now shifts to the government’s newly announced stimulus package—the largest since the pandemic—which aims to accelerate investment in strategic sectors such as AI. Its success in lifting demand will be critical in determining whether the manufacturing sector can move out of contraction after a long period of subdued momentum.
