Japan’s manufacturing activity improved in June, marking its first increase since May 2024, according to data released today. The au Jibun Manufacturing PMI surged to 50.4, easily surpassing the expected 49.5 and up from 49.4 in May.

Manufacturing Sector Recovery

• The PMI number reaching above 50 signifies growth, with June data reflecting greater output and inventory levels.

• While global demand appeared weak, new orders increased, notwithstanding the pressure from U.S. trade tariffs impacting automakers and exporters.

The uptick in manufacturing follows several months of contraction and suggests that Japanese industrial sentiment may stabilize, potentially buoyed by local economic resilience and strong wage growth this year.

Services Sector Maintains Growth Trends

Japan’s services PMI increased to 51.5 in June, up from 51.0 in May, driven by robust domestic consumption that keeps the sector firmly in positive territory. The composite PMI, which summarizes overall private sector activity, elevated to 51.4 from 50.2.

Growing activity in the services sector, supported by rising wages and improved local demand, continues to counterbalance lingering challenges faced by export-driven industries.

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