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Date: 22-may-2025 | By: Nuztrend Team
Japan’s factory activity has declined for the 11th consecutive month in May 2025, underlining the ongoing difficulties faced by the country's manufacturing sector. The latest figures from the au Jibun Bank Japan Manufacturing PMI fell to 48.3, remaining below the 50-mark that separates expansion from contraction.
Manufacturers across Japan continue to struggle with a range of structural and external challenges, including weakening global demand, inflationary pressures, and disrupted supply chains. Although some sectors have seen marginal improvements, the broader industrial outlook remains pessimistic.
Export-dependent industries—especially in automotive, machinery, and electronics—have seen declining output as overseas demand, particularly from China and Europe, remains soft. This marks a stark contrast from the post-pandemic rebound hopes projected just last year.
The weakening yen, while supportive of export competitiveness on paper, has also increased the cost of imported raw materials, eroding profit margins for many manufacturers.
The Japanese government has acknowledged the prolonged slump and is expected to introduce targeted stimulus measures aimed at revitalizing the industrial base. These may include incentives for automation, subsidies for energy-efficient upgrades, and infrastructure modernization projects.
However, experts caution that structural reform—not just short-term relief—will be essential for Japan to remain competitive in the global manufacturing landscape.
With interest rates steady, inflation slightly moderating, and overseas economies showing mixed signals, the outlook for the second half of 2025 remains uncertain. Much will depend on global trade dynamics, energy prices, and domestic policy decisions in the coming quarters.
Until then, Japan’s industrial sector may continue to operate under pressure, reinforcing concerns over the nation's broader economic resilience.
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