FX.co ★ Japan Manufacturing Growth Eases Slightly

The S&P Global Japan Manufacturing PMI edged down to 54.7 in July 2026 from 54.8 in June, but still came in above market expectations of 54.5, according to preliminary estimates. The reading marked a seventh consecutive month of expansion in factory activity, underpinned by a faster rise in output and the strongest growth in new orders in more than five years.

Employment increased at a quicker pace, while purchasing activity expanded at its fastest rate in over four years, contributing to higher input inventories amid ongoing supply chain disruptions and elevated costs associated with the conflict. Stocks of finished goods also increased, registering their first rise in two years.

On the price front, input cost inflation moderated, and output price inflation slowed to a three‑month low. Business sentiment strengthened to its highest level in four months, supported by expectations of new product launches and firmer demand, particularly in the AI and semiconductor sectors.