Japan's factories extended a run of expansion in June, according to a purchasing managers' survey released on Wednesday. The S&P Global Japan Manufacturing Purchasing Managers' Index rose to 54.8 in June from 54.5 in May, marking the sixth month in a row with a reading above the 50 threshold that separates growth from contraction. The final June reading matched the preliminary flash estimate.
The survey said the quarter ending in June represented the manufacturing sector's strongest quarterly outcome since the first quarter of 2014. Output rose sharply in June, registering the second-fastest pace of production growth since January 2022, behind only April's peak earlier in the year. Gains were concentrated in intermediate goods and investment goods manufacturers, which increased output during the month.
By contrast, producers of consumer goods recorded a decline in production in June, the first contraction in that subsector in three months. That divergence highlights differing demand patterns across manufacturing categories during the reporting period.
New orders expanded at the fastest rate since January 2022. The survey attributed much of this acceleration to stronger domestic demand. In addition, clients - particularly those located overseas - stepped up stockpiling activities. According to the report, these precautionary purchases were intended to guard against potential shortages and to hedge against price increases linked to the Middle East conflict. Export orders also registered solid gains over the month.
The survey's readings point to robust activity among manufacturers in June, with stronger order intake and higher output in several subsegments supporting the overall expansion. At the same time, the contraction in consumer goods output and the pattern of stockpiling underline specific vulnerabilities and unevenness within the sector.
Key figures
- June S&P Global Japan Manufacturing PMI: 54.8 (May: 54.5)
- Sixth consecutive month of expansion
- Production growth: second-fastest since January 2022, behind April's peak
- New orders: fastest pace since January 2022