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Asian Momentum Splits as Japan Manufacturing Finds a Floor and China Services Slow

Tighter Japanese rates alongside China’s pro‑growth stance signal a split outlook.

Overview

  • Japan’s final December manufacturing PMI rose to 50.0 from 48.7, ending five months of deterioration.
  • New orders fell at the slowest pace since May 2024 and firms continued hiring, pointing to tentative stabilization in output.
  • Input costs for Japanese factories accelerated to the fastest since April, with the weaker yen lifting materials, labor and transport expenses.
  • China’s private services PMI eased to 52.0, a six-month low, as new export business contracted due to fewer tourist arrivals, especially from Japan.
  • Services companies in China cut jobs for a fifth month and trimmed selling prices despite rising input costs, though optimism for 2026 rose to a nine-month high.