Japan's manufacturing sector shrinks less than expected to 49.9 in August, services growth slows to 52.7

[Double exposure of Japan flag on coins stacking and stock market graph chart .It is symbol of Japan high growth economy and technology.]
Dilok Klaisataporn

The S&P Global Japan Manufacturing PMI edged up to 49.9 in August 2025 from a final 48.9 in July, surpassing market forecasts of 49, preliminary estimates showed.

The reading marked the thirteenth contraction in factory activity over the past 14 months, driven by a further decline in overall sales—including a solid drop in foreign sales for the fifth consecutive month—amid the imposition of new US tariffs.

The S&P Global Japan Services PMI dropped to 52.7 in August 2025 from July’s five-month high of 53.6, a flash estimate showed. It was primarily driven by a further rise in new orders, even as overseas demand recorded a solid decline.

The S&P Global Japan Composite PMI rose to 51.9 in August 2025 from 51.6 in July, a flash estimate showed.

The Nikkei 225 Index [https://seekingalpha.com/symbol/NKY:IND#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] fell 0.4% to below 42,800 and the Topix slipped 0.15% to 3,094 on Thursday, marking the third consecutive session of losses. The Japanese yen [https://seekingalpha.com/symbol/USD:JPY#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] weakened to around 147.5 per dollar on Thursday, snapping a two-day rebound, as uncertainty over the Bank of Japan’s policy outlook persisted.

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