FX.co ★ Japan Manufacturing Shrinks the Most in 19 Months

In October 2025, the S&P Global Japan Manufacturing PMI fell to 48.3, down from September’s six-month low of 48.5 and below the anticipated 48.6, according to preliminary estimates. This figure marks the 15th contraction in manufacturing activity over the past 16 months and signifies the most significant decline since March 2024. The downturn was primarily due to the sharpest decline in factory orders seen over the past 20 months, a result of weakened customer demand and challenging business conditions. Employment numbers saw a slight increase. On the pricing front, selling prices climbed, influenced by rising costs of labor, raw materials, and fuel, as well as the impact of a weaker yen. Looking forward, business sentiment showed improvement, fueled by optimism around a potential recovery in global economic conditions, the launch of new products, and anticipated stronger demand, particularly in the electronics sector, which is expected to bolster future production output.