- Prior was 53.1
- Composite PMI 52.0 vs 52.0 prior
- New business growth accelerated for the first time in three months
- New export business fell for the fifth straight month
- Input price inflation accelerated to a six-month high
Not much is happening with this PMI but the Japanese service sector remains a bright spot, extending its growth streak to eight consecutive months.
Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence:
"Latest PMI data signalled a further modest expansion of private sector output in Japan, as a solid increase in service sector activity offset a slight reduction in factory output.
"The service sector has now driven growth in each of the past five months, with the latest survey highlighting a number of positive developments. Notably, the indicators monitoring optimism around the outlook and staff hiring moved to their highest levels since the start of 2025. New orders also rose at a quicker pace (though mildly overall), marking the first acceleration of growth for three months.
"The sustained improvements in activity and new business were accompanied by stronger inflationary pressures, however. Average input costs rose at the sharpest rate since May, which led to another solid increase in selling prices as firms looked to protect their margins.
"With a new economic stimulus package now approved by Japan's new government - which aims to boost economic growth and help ease the impact of rising costs - it will be important to see if this feeds through to further improvements in demand and output in the months ahead."
The Bank of Japan should be worried about that rise in input inflation. They're already very close to hiking rates on Dec 19 with the market pricing at 66%.
