FX.co ★ Japan Composite PMI Rises to 6-Month Peak

Japan’s S&P Global Composite PMI Business Activity Index rose to 53.4 in August 2026 from a final 52.7 in July, according to flash data. This was the highest reading since February and marked the 17th consecutive month of expansion in private-sector activity, supported by a strong rebound in manufacturing output and faster growth in services.

New orders increased at the fastest pace in six months, though external demand diverged across sectors. Manufacturers reported export sales rising at their quickest rate since early 2018, while service providers recorded a sharp decline in overseas business.

Firms continued to expand employment for the 35th month in a row, with the pace of job creation edging up. Input cost inflation eased to a five-month low but remained elevated, driven by higher raw material, energy, and wage costs, further exacerbated by a weak yen and ongoing conflict in the Middle East. Output prices kept rising at one of the fastest rates on record.

Business sentiment strengthened to its highest level since February, indicating growing optimism despite persistent cost pressures.