Jibun Bank Composite PMI

The au Jibun Bank Japan Composite PMI, or Purchasing Managers' Index, measures monthly direction of private-sector output in Japan. Compiled by S&P Global and sponsored by au Jibun Bank Corporation, it combines factory output and services activity into its headline, the Composite Output Index. It draws on about 800 firms, around 400 manufacturers and around 400 service firms, stratified by sector and workforce size on GDP contributions.

A reading above 50 signals expansion versus the prior month, while below 50 signals contraction and 50 means no change. It tracks direction only, not output levels, GDP, or forecasts, and it excludes retail, construction, agriculture, and the public sector. Arabic financial press uses the standard Arabic composite-PMI construction for its name.

Responses are collected in the second half of each month and compare change with the previous month. The flash estimate uses about 85% to 90% of responses and appears about a week before final indices under a 09:30 JST (00:30 UTC) embargo.

Final manufacturing readings follow around the first of next month, then services and composite readings follow days later. Each release carries orders, employment, backlogs, prices, and outlook detail with charts and economist comment. Underlying answers are never revised after publication, though seasonal factors can update the adjusted series, and the usual flash to final gap is small.

The headline blends two output gauges by GDP share, so either part can lift it.

• Manufacturing Output Index: captures monthly direction of factory production volumes.
• Services Business Activity Index: captures monthly direction of services activity volumes from a single question, matching Manufacturing Output.
• New Orders and New Export Orders: track direction of domestic and foreign business flows for factories and services.
• Employment and Backlogs of Work: track direction of staffing levels and pressure from unfinished orders.
• Input Prices, Output Prices, and Future Output: track direction of costs, selling prices, and activity expectations.

A May 23, 2023 flash put the composite at 54.9 against 52.9, its strongest since October 2013 and second strongest since September 2007. Services led with 56.3 against 55.4, a series record on new business, exports, and outstanding business, while factory output recovered to 51.9 from 47.9. The lesson is clear: a strong composite can be services led while factories barely expand. Manufacturing PMI reached 50.8 against 49.5, its first improvement since October 2022, as delivery times shortened for the first time since January 2020.

1. Survey answers: Panels of around 400 manufacturers and 400 service firms report if each variable is higher, unchanged, or lower than the prior month.
2. Diffusion index: Each variable becomes a 0 to 100 index from higher and unchanged shares: I = H + 0.5 x U. For example, 300 of 1000 firms higher, 500 unchanged, and 200 lower mean 30 and 50, so 30 plus 25 equals 55.0.
3. Seasonal adjustment: Indices are then seasonally adjusted, or smoothed for regular calendar patterns.
4. Weights: It uses 0.30 for New Orders, 0.25 for Output, 0.20 for Employment, 0.15 for Suppliers' Delivery Times inverted, and 0.10 for Stocks of Purchases. For example, 56.0, 54.0, 52.0, 52.0, and 50.0 give 16.8 plus 13.5 plus 10.4 plus 7.8 plus 5.0 equals 53.5.
5. Composite blend: The composite is a GDP-weighted average of those two gauges using official value-added shares, with no fixed split. For example, 0.3 times 52.0 for factories and 0.7 times 56.0 for services give 15.6 plus 39.2 equals 54.8.