Japan private sector remained robust in August, with output growth at its
fastest since February and manufacturing and services both gaining momentum.
Manufacturing new export orders rose at the quickest pace in about
eight-and-a-half years, supported by sizable backlogs in semiconductors and
AI-related industries. Input costs still climbed sharply amid Middle East
conflict-driven supply and energy shocks and a weak yen, but cost inflation
eased to a five-month low. Output price growth remains near historical highs,
and firms may need to see sustained disinflation before cutting selling prices.
Business confidence, sales and employment improved month-on-month; the private
sector is expected to stay resilient unless new price or demand shocks emerge.
