The S&P Global Japan Manufacturing PMI was slightly revised higher to 48.9 in July 2025 from the preliminary estimate of 48.8, but down from June’s final reading of 50.1. The latest figure marked the twelfth contraction in factory activity over the past 13 months, driven by a renewed decline in output amid lingering uncertainty over US tariff policy and weak demand. New orders continued to fall, though the rate of contraction eased slightly, with export orders falling at the softest pace in four months. Purchasing activity shrank at the fastest rate since February 2024, while supplier performance continued to deteriorate. Meanwhile, employment rose amid forecasts of stronger demand in the months ahead. On prices, input cost inflation eased to a four-and-a-half-year low, while output cost inflation accelerated to its fastest pace in a year as firms passed on higher costs to customers. Lastly, sentiment improved to a six-month high, supported by hopes of better demand conditions.