Japan's manufacturing activity expanded at the fastest pace in over four years in April, as output and new orders surged, according to S&P Global data.
The headline manufacturing purchasing managers' index rose to 55.1 in April from 51.6 in March, marking the strongest reading since January 2022 and signaling solid growth in business conditions.
Factory output increased at the quickest rate since February 2014, supported by stronger demand and inventory-building amid uncertainty linked to the Middle East conflict. New orders grew at the fastest pace since January 2022, with firms citing higher client demand and increased interest in AI-related products.
Supply chain conditions deteriorated sharply, with supplier delivery times lengthening at the steepest rate in 15 years, while input cost inflation accelerated to a three-and-a-half-year high, driven by higher raw material, oil and transport costs.
Manufacturers raised selling prices at a faster pace to offset rising costs, while employment growth picked up to one of the strongest levels since early 2022.
Despite the strong data, business confidence weakened, with firms citing uncertainty over global demand and supply disruptions.