Japan’s manufacturing sector lost momentum in September as output growth eased to a three-month low, while new orders expanded at their weakest pace in four months.
Reuters reported that the S&P Global Japan Manufacturing Purchasing Managers’ Index (PMI) slipped to 54.1 from 54.9 in August, marking the weakest reading in six months but remaining above the 50-point threshold for a ninth consecutive month.
Production continued to increase, although at a slower pace, while growth in total new orders moderated sharply from August’s multi-year high as some customers unwound earlier inventory accumulation.
External demand remained resilient, with new export orders rising for a ninth straight month. Export growth was the second-strongest since January 2018, supported by stronger demand across Asian markets and improved sales to the US.
Employment increased for a 22nd consecutive month, with hiring remaining close to August’s recent high.
Cost pressures also eased slightly, with input price inflation slowing to a six-month low, although manufacturers continued to raise selling prices at one of the fastest rates since late 2022.
Manufacturers remained optimistic about the year ahead, supported by expected demand from semiconductors and artificial intelligence-related technology, although supply disruptions, component shortages and elevated costs remained key risks.
