International
Japan's Manufacturing Output Growth Hits 12-Year High; Service Sector Expansion Slows
Japanese manufacturing output rose at its steepest rate since February 2014, although this rebound was tempered by a slower expansion in service sector activity, pulling overall private sector growth to its weakest pace in four months during April.The S&P Global Flash Japan PMI Composite Output Index dipped to 52.4 in April from 53.0 in March, remaining above the 50.0 threshold that separates expansion from contraction.While total activity has now expanded for 13 consecutive months, the latest reading marked the softest rate of growth seen so far in 2026.Some manufacturers raised output due to concerns over future supply shortages linked to the Middle East war, contributing to the sharp manufacturing uptick.In contrast, service sector activity grew at its mildest pace in 11 months, while new export business at the composite level rose at the slowest rate in four months.Employment continued its steady rise for over 2.5 years, though capacity pressures persisted as outstanding business levels increased for the fifth straight month.Average input costs surged at the sharpest rate since January 2023, driven by higher prices for staff, raw materials, fuel, and energy-often tied to Middle East developments and a weak yen.Goods producers experienced notably steeper cost inflation than service providers, pushing average output charges to rise at the quickest pace since composite data began in late 2007.Business confidence regarding future output weakened for the second consecutive month, falling to its lowest level since August 2020 due to uncertainty and market disruption from the Middle East war.
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