Japan flash PMIs rise in February; composite hits 53.8, exports surge

Japan's February flash PMIs showed broad-based improvement, with the composite output rising to 53.8, marking the strongest pace of expansion since May 2023. This increase reflects renewed momentum in manufacturing, significantly boosted export demand, and improved business confidence. Notably, the composite new orders rose at the fastest rate in nearly three years, indicating robust underlying demand. The Services PMI ticked up to 53.8, while Manufacturing PMI hit 52.8, marking notable growth in domestic and overseas demand. Employment rates remained solid despite capacity pressures rising, with backlogs at historic highs. Coupled with rising input costs and output price inflation at a 21-month high, the data suggests a solidifying economic foundation, supported by optimistic business sentiment following recent political stability.