Hawkish Sign from Bank of Japan and a Sluggish Sign in U.S. Manufacturing
December 1, 2025
(163) The final month of 2025 kicked off with two concerning pieces of news to risk-taking investors. The first impulse came from a speech by Bank of Japan Governor Ueda that more convincingly than previous signals suggests that officials will raise the bank’s short-term interest rate by another 25 basis points at the upcoming policy review on December 18-19. The U.S. manufacturing purchasing manager surveys from November contributed the other dynamic.
- The revised S&P Global PMI reading of 52.2 revealed slower growth than in October.
- The even more influential manufacturing index compiled by the Institute of Supply Management was below the 50 level that separates improving from deteriorating conditions for a ninth straight month and, at 48.2, was the lowest score in four months. The orders sub-index also printed at a 4-month low, while measures of employment and inflation respectively were at a 3-month low and a 2-month high.
Bitcoin took the biggest wallop, plunging around 6% overnight.
U.S. equities are currently down 0.5% (DOW and SPX), 0.7% (Nasdaq) and 1.0% among small caps (Russell 2000). Japan’s Nikkei-225 index closed 1.9% lower, and the Australian and Taiwanese stock markets lost 0.6% and 1.0%. Among major European bourses, a 1.0% loss so far in the German DAX has taken the largest hit.
Uncertainty surrounding the war in Ukraine helped lift the price of WTI oil by 1.6%. Gold is 0.2% firmer.
The dollar opened this new month with a 0.7% drop against the yen and a 0.3% decline on a weighted basis and versus the euro, which carries the largest weight in the DXY index. Other dollar losses amount to 0.2% against the Swiss, Australian, Turkish and Mexican currencies and 0.1% versus the won, loonie, kiwi and sterling.
Sizable increases have occurred in ten-year sovereign debt yields of seven basis points so far today in the United States, France and Italy, six bps in Japan, Germany and Spain, and four basis points in Great Britain.
Euroland manufacturing PMI survey results showed a clear dichotomy between the two largest economies using the euro and the other economies in the joint currency bloc. The German and French readings of 48.2 and 47.8 revealed the sharpest rates of decline in two and nine months, respectively. The other individual nation readings in the bloc, ranging from 50.4 in Austria to 52.8 in Ireland were each above the breakeven threshold of 50, including a 32-month high in the group’s third biggest economy, Italy. As a whole, the drag of Germany and France outweighed the rest, sending Euroland’s PMI index 0.4 points downward to a 5-month low of 49.6.
Among other European PMI scores, the British manufacturing index for November got revised up a half point to a 14-month high of 50.2. The Swiss PMI of 48.2 reached a 2-month high. Norway’s PMI rose to a 16-month high of 53.0, but Sweden’s 48.2 reading was at a 2-month low. Russia scored a 3-month high of 48.3, signaling a slower pace of deterioration. Hungary’s 53.4 showed the fastest growth in 30 months. The Polish and Czech readings of 49.1 and 48.0 reflected the slowest rate of decline in seven and two months, respectively. Turkey’s reading was also 48.0, a nine-month high in that case.
Japan’s manufacturing PMI was revised lower to 48.7, still a 3-month high and above October’s 19-month low of 48.2. Two Chinese manufacturing PMI surveys were released. The government-authorized NBS measure was at a 2-month high of 49.2, while the privately compiled PMI of 49.9 was at a 4-month low. Composite and non-manufacturing PMIs from NBS of 49.7 and 49.5 each reflected 35-month lows.
Elsewhere, India’s manufacturing PMI fell 2.6 points to a 9-month low of 56.6 in November. Indonesia’s survey punched in at a 9-month high of 53.3. Vietnam’s 53.8 was a 2-month low, while Malaysia’s PMI rose to a year and a half high of 50.1. Thailand’s 56.8 reading was the best in 3 months. Taiwan’s 48.8 was an 8-month high, while the Filipino score of 42.4 was its lowest in over four years. South Korea’s 49.4 matched October’s 2-month low. Australia’s 51.6 was unrevised from its preliminary estimate and a 3-month high. The Absa-compiled South African sank sharply to a 9-month low of 42.0. Mexico’s reading of 47.3 was at a 5-month low. Brazil’s 48.8 was at a 6-month high, and Canada’s reading dipped to a 2-month low of 48.4.
Turkish GDP growth last quarter o f 1.1% versus 2Q and 3.7% year-on-year were each at 2-quarter lows.
Polish on-year GDP growth of 3.8% in the third quarter was the most in three years.
India’s current account deficit as a percent of GDP shrunk to 1.2% last quarter from 2.2% in the second quarter.
Consumer price inflation in Indonesia settled back to 2.7% this month from October’s 18-month high of 2.86%.
A 0.9% year-on-year increase of Indian industrial production in October was the smallest rise in 14 months.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Japan Governor Ueda, Indonesian inflation, manufacturing purchasing manager surveys, Turkish and Polish GDP
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