FX.co ★ Japan Manufacturing Shrinks the Most in 6 Months

The S&P Global Japan Manufacturing PMI slipped to 48.4 in September 2025, down from a final reading of 49.7 in August, falling below market expectations of 50.2, based on preliminary data. This figure represents the 14th contraction in factory activity over the past 15 months and the most significant decline since March. The decrease was primarily driven by the most rapid drop in new orders since April, with output also declining at the fastest rate in six months. Businesses attributed the reduction in new orders to clients adopting cautious inventory policies amidst challenging market conditions. Notably, international sales continued to decline. On the pricing front, input costs rose, influenced by increased expenses for labor, raw materials, and fuel. Consequently, output prices continued their upward trend. Looking ahead, business confidence has weakened.