The S&P Global Japan Composite PMI rose to 51.9 in August 2025 from 51.6 in July, a flash estimate showed. It marked the fifth straight month of private sector expansion and the fastest pace since February, supported by renewed growth in factory output and solid gains in services activity. Total new business expanded at the quickest rate in six months, though the increase came solely from the service sector. Employment edged higher, while backlogs of work grew at the fastest pace since June 2023, despite being only marginal. Export orders, however, continued to weaken, posting a steeper decline and marking a fifth month of contraction. On the cost front, input price pressures intensified as firms faced higher costs for raw materials, labor, fuel, and transport. Yet, output price inflation eased for the second straight month to its lowest since October 2024. Business confidence improved but remained below the survey’s long-run average.