Japan Manufacturing Growth Slows to Seven-Month Low in October

Japan's manufacturing sector experienced its slowest expansion in seven months during October, according to the S&P Global Japan Manufacturing Purchasing Managers’ Index. The index declined to 53.3 from 54.1 in September, reflecting a loss of momentum and rising cost pressures despite ten consecutive months of growth in output and new orders.

S&P Global Market Intelligence reported that the AI boom and semiconductor demand provided critical support, with strong orders arriving from North America, China, Africa, and the Middle East. This demand, alongside new product launches, pushed manufacturer optimism to an eight-month peak. Employment growth also remained steady near an eight-and-a-half-year high.

Rising input price inflation created significant headwinds for the sector. To hedge against further price increases, manufacturers increased their purchase stocks at the fastest rate seen in nearly four years.