Japan’s manufacturing sector contracted again in October, with the final S&P Global PMI edging down to 48.2 from 48.5 in September. According to S&P Global’s Pollyanna De Lima, demand softness — particularly in the automotive and semiconductor sectors — triggered the sharpest fall in new orders since early 2024, while exports to Asia, Europe, and the U.S. continued to decline.
Manufacturers also faced rising cost pressures, as higher input costs squeezed margins even as demand waned. To offset these pressures, many firms lifted selling prices despite intense competition for new business.
Still, sentiment showed some improvement. The decline in production was relatively contained, and many firms expressed greater optimism about future output. Hopes for successful new product launches and expectations that the impact of U.S. tariffs will eventually fade helped boost confidence.
