Japan manufacturing PMI slows to seven-month low in October

Japan’s manufacturing sector slowed significantly in October, marking its weakest growth in seven months according to the S&P Global Japan Manufacturing PMI. The index fell to 53.3 in October from 54.1 in September, signaling contraction rather than expansion. While production increased for the tenth consecutive month, it was the slowest growth since March.

This decline can be attributed to a slowdown in production and new orders, alongside rising costs. Companies reported higher new order volumes and stronger demand, particularly in the semiconductor sector. However, input price inflation increased in October, marking the first rise in six months, while output charge inflation dropped to a six-month low.

To mitigate these rising costs, manufacturers increased their stockpiles of purchases at the fastest rate in nearly four years. Despite these challenges, manufacturers expressed optimism for the coming year, buoyed by factors such as new product launches, the artificial intelligence boom, and the acquisition of new clients.