Overview
- Australia’s composite PMI eased to 51.1 in December, extending a 15‑month expansion as manufacturing improved to 52.2 while services slowed to 51.0.
- Japan’s composite reading slipped to 51.5 for a ninth month of growth, with services at 52.5 and manufacturing at 49.7, the mildest factory contraction in about 18 months.
- Both surveys reported the fastest input‑cost inflation in roughly eight months and firmer output prices, signaling persistent pricing pressures into year‑end.
- Employment rose in both economies, with Australia adding staff and Japan posting its fastest job growth since May 2024 alongside rising services backlogs.
- The prints reinforced policy expectations, including a higher‑for‑longer RBA stance and market anticipation of a 25bp BoJ increase at this week’s meeting, while Citi projected two RBA hikes in 2026.