Street Calls of the Week
Investing.com -- Japanese private sector activity expanded at the slowest pace in five months during October, with the S&P Global Flash Japan PMI Composite Output Index falling to 50.9 from 51.3 in September.
The services sector continued to drive overall growth, offsetting ongoing manufacturing weakness, though service activity growth eased to a four-month low. Manufacturing production continued to contract, with the Flash Japan Manufacturing PMI Output Index at 48.1 compared to 47.4 in September.
New business declined for the first time in 16 months, with manufacturers reporting the steepest reduction in new orders since February 2024. Foreign demand for Japanese goods and services also fell, though at a more modest pace than in recent months.
Employment growth continued but slowed to a weaker rate than the average seen over the past two years, with both service providers and manufacturers recording only marginal increases in headcounts.
Inflationary pressures intensified in October, with input costs rising at a sharp and accelerated pace. Companies attributed higher costs to increased labor, raw material and fuel expenses, as well as a weaker yen. In response, firms raised their selling prices at the quickest pace in three months.
Business confidence about the year ahead weakened slightly from September and fell below the survey’s long-run average. Sector trends diverged, with service companies becoming less optimistic while manufacturers expressed increased confidence.
"While the service sector remained a key growth engine for the wider economy, fading momentum here will be a point of concern," said Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence.
"The manufacturing sector meanwhile remained stuck in decline, with the latest survey pointing to the quickest reduction in factory orders for 20 months."
The data was collected between October 9-22, 2025.
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