Japan’s Manufacturing PMI was finalized at 50.0 in December, rising from 48.7 in November and ending a five-month stretch of contraction. The reading points to stabilization rather than renewed expansion, but marks a clear improvement in underlying momentum as 2025 drew to a close.
According to Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, factories reported a much softer decline in sales alongside broadly steady production levels. Employment also provided a modest positive signal, with staffing levels rising at a slightly faster pace as firms positioned for firmer demand in the months ahead.
That said, confidence remains fragile. Respondents continued to flag headwinds from sluggish global conditions, Japan’s ageing population, and rising cost pressures. Input prices climbed at the fastest pace since April, driven by higher raw material and labor costs as well as a weak Yen, prompting firms to lift output prices to protect margins.
