Japan's factory activity slows to six-month low as PMI falls to 54.1

In September, Japan's manufacturing PMI eased to 54.1, the lowest reading in half a year, after falling from 54.9 the previous month. Firms reported a deceleration in both production and new orders, though the sector remains in expansion for the ninth month in a row. Export demand stayed robust, with new overseas orders increasing for the ninth consecutive month, supported by stronger Asian economies and U.S. sales.

Employment rose for the 22nd straight month, maintaining a pace close to recent highs. Input cost pressures eased to a six-month low, yet companies continued to raise selling prices at a relatively rapid rate. Optimism about output over the next year stayed steady, with demand for semiconductors and AI-related technology highlighted as growth drivers.