Japan Business Activity Strongest Since 2023 on Takaichi’s Push

February 20, 2026 - 02:54

Japan's private sector surged in May, reaching its strongest pace of growth since late 2023. This expansion is driven by a robust increase in new orders and a resilient manufacturing sector, which has now remained in growth territory for three consecutive months.

The positive data arrives as Prime Minister Sanae Takaichi prepares to champion new investment initiatives. Analysts suggest the sustained expansion in factory output and strengthening corporate sentiment are creating a favorable backdrop for the government's economic plans. The service sector also showed notable vigor, contributing to the broad-based uptick.

This acceleration in business activity points to underlying resilience in Japan's economy. Firms reported increased client demand both domestically and from international markets. The overall picture indicates that private sector momentum is building, providing a tailwind for policymakers aiming to cement a stable recovery path. The coming months will be critical to see if this growth can be sustained and translate into wider economic benefits.