Japan's composite PMI rose to 52.5 in June, but inventory-driven growth may not be sustainable

(1) The S&P Global June preliminary PMI shows that Japan's Composite Output Index rose from 51.1 in May to 52.5, marking the first overall business activity improvement since the outbreak of the Middle East war. (2) Annabel Fiddes from S&P Global Market Intelligence noted that this growth is partly due to stockpiling behavior triggered by the war, but as warehouses fill up and cost pressures intensify, this momentum may be difficult to sustain. (3) The survey also indicates that input costs saw the largest increase in nearly four years, driving another substantial rise in average selling prices; meanwhile, ongoing concerns about inflation and supply chain disruptions continue to cast a shadow over business expectations.