The Jibun Bank Japan Composite PMI stood at 50.2 in May 2025, above the flash estimate of 48.5 but down from 51.2 in the previous month. The latest result marked the second straight month of expansion in private sector activity, amid weaker growth in the service sector and a sustained decline in manufacturing output. New orders rose only slightly, reflecting softer demand for services and a milder drop in factory orders. Employment continued to grow modestly across both sectors, outpacing the historical average. On the cost side, input price inflation slowed to a 14-month low, though overall cost pressures remained elevated, leading to a further increase in selling prices. Finally, business confidence improved from April’s low—its weakest since August 2020 - thanks to stronger sentiment among manufacturers and service providers, but it remained below the 2024 average.