Japan's PMI rebounded, indicating that the U.S. will intensify measures ahead of the tariff increase.

Gate News bot message, Japan's manufacturing activity expanded for the first time in over a year in June, which may be a sign of pre-emptive production increases before the United States raises tariffs next month.

S&P Global released data on Monday showing that the Au Jibun Bank Manufacturing Activity Purchasing Managers' Index (PMI) rose from 49.4 in May to 50.4, breaking through the 50 threshold and reaching the highest level since May 2024. The services index also increased from 51.0 to 51.5.

The recovery of manufacturing activity indicates that companies are ramping up production for export in order to avoid the impact of the tariffs imposed by the United States. The government led by President Donald Trump will raise so-called reciprocal tariffs on many countries on July 9, after keeping these tariffs at 10% for the past 90 days. For Japan, this means that tariffs on many products exported to the U.S. will jump to 24%. Currently, the U.S. has imposed higher tariffs on products like steel, aluminum, and automobiles.

Mitsui Sumitomo Trust and Banking economist Kazuki Noda stated, "Companies seem to be eager to increase production before the tariffs take effect. Although new orders remain quite weak, we are seeing a noticeable improvement in the manufacturing production index."

While the decline in the new orders sub-index was larger than the previous month, there were some positive signs. The rebound in output and the resilience of the services sector could allow Japan to avoid a technical recession after the economy contracted in the first quarter, Noda said.

The PMI report from Japan shows that manufacturers expect production to increase by 9% in June, while the decline in the new orders sub-index is greater than last month. With production rebounding, Noda anticipates that the Japanese economy will avoid falling into technical recession after contracting in the first quarter.