FX.co ★ Japan's Manufacturing Sector Back to Expansion as PMI Hits 50.0 in December

Japan's manufacturing sector has shown signs of recovery as the au Jibun Bank Manufacturing Purchasing Managers' Index (PMI) nudged up to 50.0 in December, marking a shift from contraction to expansion. This latest reading was released on January 5, 2026, and reflects a critical improvement from the previous month's indicator of 49.7.

For the month of December 2025, the PMI rose to this significant milestone, indicating steadying conditions amid a challenging economic climate. The index sitting exactly at 50.0 suggests that the manufacturing industry is now experiencing neither contraction nor expansion, potentially stabilizing after a period of contraction. This level serves as a threshold that separates growth from decline in the sector.

The December rise could signal newfound strength within Japan’s manufacturing industry, suggesting possible resilience against global economic headwinds. As manufacturers recalibrate and adjust supply chains, maintaining momentum above the 50-mark could be crucial to sustaining growth in the new year. Market analysts will closely monitor upcoming trends to determine if the sector's stability can be translated into consistent growth.