Japan manufacturing expands as orders rise fastest since 2018, PMI shows

Japan's manufacturing sector expanded in August as new orders rose at their fastest pace since January 2018, according to a business survey released on August 21. The S&P Global Flash Japan Manufacturing Purchasing Managers' Index (PMI) rose to 55.1 in August from 54.5 in July, indicating growth. Annabel Fiddes, economics associate director at S&P Global Market Intelligence, noted that while growth momentum picked up across both manufacturing and service sectors, factories continued to lead growth.

The improvement in Japan's manufacturing sector comes as the country's economy slowed in the second quarter, with GDP data released on August 17. Manufacturers saw the steepest increase in total sales and overseas demand in over 8½ years, with strong demand from semiconductor and AI-related industries cited as a key factor.

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