Japan's manufacturing contraction eases in Dec, services cool: PMI

• Japan's manufacturing sector contracted at a slower pace in December, with the PMI rising to 49.7 from 48.7 in November.
• The service sector lost some momentum, with its PMI slightly falling to 52.5 in December from 53.2 in November.
• Business confidence for 2026 was robust but waned, especially in manufacturing, due to global economic conditions, an ageing population, and rising costs.
• Demand for goods fell at the slowest rate in 1.5 years, suggesting potential stabilization in the manufacturing sector.
• Overall employment rose at the fastest pace since May 2024, but inflation climbed at its quickest rate in eight months, leading firms to raise selling prices.

Why It Matters: This shows Japan's economic challenges amid contraction and rising inflation.