Japan’s Flash PMI Eases to a 4 Month Low of 52.5 as Domestic Demand Cools
Japan’s private sector grew at its slowest pace in four months in September, according to S&P Global’s flash PMI, published at 00:30 GMT on 24 September. The composite output index fell to 52.5 from 53.5. It still marks the 18th consecutive month of growth.
| Index | August | September |
|---|---|---|
| Composite output | 53.5 | 52.5 |
| Services business activity | 52.5 | 51.6 |
| Manufacturing PMI | 54.9 | 54.1 |
| Manufacturing output | 56.1 | 54.9 |
S&P Global flash Japan PMI, above 50 signals growth. Data collected 8 to 21 September 2026.
Exports hold, home demand softens
New export orders grew at the same rate as in August, which was the fastest in eight and a half years, and that growth came entirely from manufacturing. Services firms reported a further drop in overseas demand. The survey attributes the slowdown in total new orders largely to softer domestic demand. Factory output growth slipped to a three-month low.
Prices remain the sore point. Output charges rose at a rate only slightly below August’s survey record. The survey linked the cost pressure to the weak yen, conflict in the Middle East and rising staff costs. Employment rose at the fastest rate in seven months, and business confidence strengthened. Firms cited demand linked to artificial intelligence, including semiconductors, as well as defence and cars.
Where Japan sits among the flash readings
On the composite measure, Japan’s 52.5 sits below the euro area’s 53.1 and Germany’s 53.8, and above the United Kingdom’s 51.7, from the flash readings The Edge reported on 23 September. It is 5.9 points below the 58.4 in the United States, on our calculation.
Why it matters: For the Bank of Japan, softer domestic demand tempers an otherwise inflationary signal from selling prices rising at close to the survey’s record rate, on our reading. On the survey’s own readings, strong export orders and faster hiring keep the private sector expansion intact.
Outlook: The final September readings will show whether export orders can keep offsetting softer demand at home.
Sources: S&P Global, The Edge.
