FX.co ★ Japan Composite PMI Slips to 4-Month Low

Japan’s S&P Global Composite PMI Business Activity Index slipped to 52.5 in September 2026 from a final 53.5 in August, according to flash estimates. This marked the weakest reading since May, as manufacturing output fell to a three-month low while growth in services activity softened to a modest pace.

Total new orders slowed even as new export business posted another strong gain, with export growth matching August’s eight‑and‑a‑half‑year high. Employment continued to rise for a third consecutive year, and payrolls expanded at their fastest rate since February. Backlogs of work increased at the sharpest pace in seven months.

On the price front, input cost inflation eased to a four-month low but remained elevated, driven by higher energy and raw material costs partly linked to the war in the Middle East and a weaker yen, as well as increased labor and transportation expenses. Firms continued to raise selling prices at a rate only slightly below August’s record high.

Business sentiment strengthened to a seven-month peak, supported by optimism over demand in artificial intelligence, semiconductors, defense, and automobiles.