Decline in Manufacturing PMI

The Japanese Jibun Bank Manufacturing PMI Index dropped to 48.9 in July, as reported by S&P Global on Friday. This figure, falling below the neutral 50 mark, indicates a deterioration in the manufacturing sector and is a decrease from last month's 50.1.

Expert Analysis

Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, commented on the findings: "Japan's manufacturing sector fell back into contraction territory during July, with a sustained drop in sales leading firms to downwardly adjust their output levels." She attributed the subdued demand environment to uncertainties in US trade policy, noting that the survey data were mostly collected before the US-Japan trade deal announcement on 23 July.

Customer Hesitancy

Fiddes also highlighted a hesitancy among customers to commit to orders, further exacerbating the sector's challenges.