What the US PMI of 58.4 Indicates for the Next Phase of the Global Economy: Reading Trends in Currencies, Stocks, Government Bonds, and Real Estate Across Countries

What do strong demand and strong inflation mean? Reading the currencies, stocks, government bonds, and real estate of the US, Japan, and the world.

This article is a detailed analysis for investors and business executives, reconstructed by cross-referencing the latest US economic indicators with macroeconomic trends in countries around the world.

Conclusion

The US is currently not in a phase of ‘cutting interest rates because the economy is bad.’ It is in a phase where ‘the economy is too strong and inflation is also strong, so there is a possibility that interest rate hikes will continue.’

In this environment, market trends are likely to be as follows:

• US Dollar: Firm.

• US Treasuries: Short- and medium-term yields rising, prices falling.

• US Stocks: Headwinds for high-P/E growth stocks.

• US Real Estate: Headwinds for housing and REITs.

• Japanese Yen: Fluctuating depending on the interest rate differential between Japan and the US.

• Japanese Stocks: Relative strength in financial, trading, and capital investment stocks.

• Japanese Government Bonds: Yields rising.

• Japanese Real Estate: Selective in high-price areas.

1. What happened

The meaning of a PMI of 58.4

The PMI (Purchasing Managers’ Index) is an index based on surveys of corporate purchasing managers. A reading above 50 indicates economic expansion compared to the previous month, while a reading below 50 indicates contraction.

The figures for the US Flash PMI in September are as follows:

• Composite PMI: 58.4 (August: 56.0)

• Services PMI: 58.7 (August: 56.5)

• Manufacturing PMI: 57.0 (August: 53.9)

• Manufacturing Output Index: 56.7

• New Orders: 58.2

• Input Prices: 66.4 (August: 59.9)

A composite PMI of 58.4 indicates that private sector activity is extremely strong. S&P Global explains that this PMI is consistent with an annual economic growth rate of approximately 5%, suggesting growth of about 4% for the third quarter of 2026 as a whole.

What is important is new orders.

This recent rise is not just companies clearing out inventory. New orders rose to 58.2, the highest level since March 2022.

This indicates the possibility that the following various types of demand are actually increasing.

Employment is also increasing.

Companies have increased hiring to respond to rising orders. Job growth has reached its strongest pace since June 2022.

However, labor shortages are also being reported simultaneously. Even when companies receive orders, they are facing bottlenecks such as the following:

• Lack of personnel

• Lack of parts

• Lack of shipping capacity

• Lack of production equipment

• Factory processing capacity is insufficient

2. Which sectors are strong?

Service sector

This time, the strongest sector was services. The Services PMI was 58.7, the highest level in about five years. New orders saw their strongest growth in over four years, supported by domestic consumer demand.

Sectors with potential for strength:

• Dining out, travel, and leisure

• Logistics and telecommunications

• Financial services, IT services, and medical services

• Corporate consulting and digital advertising

• Housing-related services and repair/maintenance

Why services are strong:

1. US employment and income are being maintained to a certain extent.

2. Consumers are shifting their spending from goods to services.

3. Corporate investment in AI, cloud, cybersecurity, and data centers is boosting service demand.

4. Companies are compensating for labor shortages through outsourcing.

5. Financial, insurance, and professional services have relatively strong price-pass-through power.

Manufacturing sector

The Manufacturing PMI was 57.0, a significant improvement from 53.9 in August. The manufacturing production index has also risen to 56.7.

Sectors with potential for strength:

• Semiconductors and semiconductor manufacturing equipment

• Defense and Aerospace

• Power Equipment

• Machine Tools and Industrial Robots

• Automotive/EV-related, Chemicals, and Medical Devices

• Logistics Equipment and Construction Materials

Why Manufacturing is Strong: In the United States, the following investments are proceeding simultaneously.

Until now, US companies have kept costs down by sourcing products from overseas, but they are currently increasing domestic capital investment to address geopolitical risks, export controls, tariffs, shipping risks, reliance on China, and rising labor costs.

Industries that build supply capacity are strong

The key point this time is that not only ‘companies receiving demand’ but also ‘companies increasing supply capacity’ are strong.

• Robots, Machine Tools, and Factory Automation

• Logistics Optimization

• Power/transmission, cooling

• Construction

• Human resource development

• Production management software, predictive maintenance

Because there is a shortage of human resources and equipment in the U.S., companies are buying production capacity itself. For Japanese companies, there are significant opportunities for Yaskawa Electric, Fanuc, Okuma, DMG Mori, Misumi Group, Hitachi, Mitsubishi Electric, Omron, Daikin, and Ebara Corporation.

3. What is the cause of inflation?

The current inflationary pressure is not due to a single factor. It can be broadly divided into six categories.

1. Energy prices

Crude oil prices have risen due to supply concerns stemming from the situation in the Middle East. The U.S. CPI for August rose 3.4% year-on-year, and gasoline prices rose 3.9% month-on-month. Gasoline alone accounted for more than one-third of the monthly CPI increase. Energy prices ripple through to gasoline, electricity, transportation, chemical products, plastics, fertilizers, airfares, and food logistics.

2. Transportation costs

Due to high crude oil prices, costs for trucking, air freight, shipping, warehousing, and delivery are rising. Fuel and transportation costs are also affecting the rise in input prices for the service sector PMI.

3. Wages

While demand is strong and employment is increasing, there is a shortage of human resources. Companies are raising wages to secure personnel. When wage increases exceed productivity gains, companies respond by raising prices, curbing hiring, automating, or reducing service levels.

4. Insufficient supply capacity

While corporate orders are strong, supply chain delays have reached their widest point since July 2022. When demand exceeds supply capacity, delivery times lengthen, inventories run short, and pricing power shifts to the seller, leading companies to raise sales prices and increase backlogs.

5. Tariffs and policy uncertainty

Tariffs and import restrictions drive up the costs of imported goods, parts, construction materials, and equipment. Because it is difficult for companies to predict the future of tariffs, they need to take measures such as stockpiling, changing suppliers, altering transportation routes, and diversifying factories across multiple regions, all of which increase costs in the short term.

6. AI and data center investment

AI data centers require massive amounts of electricity, land, transformers, construction, cooling equipment, semiconductors, communications, and human resources. The IEA expects data center electricity consumption to double from approximately 460 TWh in 2024 to 945 TWh by 2030. While AI investment has the potential to increase productivity, it pushes up demand for resources in the short term, creating upward pressure on prices.

4. Correlation between PMI rise and inflation

Good PMI Rise vs. Bad PMI Rise

There are two types of PMI increases.

• Good PMI rise: A pattern where demand increases, productivity rises, capital investment and production capacity grow, and supply constraints are eased. Because wage increases are absorbed by productivity, growth rates rise while inflation eventually settles down.

• Bad PMI rise: A pattern where demand increases but supply capacity and human resources are insufficient, leading to transportation bottlenecks and rising crude oil and material costs. As companies pass on costs, inflation expectations rise. In this case, the economy is strong, but inflation is also strong.

It can be said that the current PMI has quite strong elements of the latter (a bad PMI rise).

The Gap Between Supply and Demand

In an environment where demand is increasing while supply cannot keep up, the following structure holds true:

$$text{Inflation Pressure} approx text{Demand Increase} – text{Supply Capacity Increase}$$

In this PMI, the combination of “New Orders: 58.2,” “Supplier Deliveries: Slower,” “Backlog: Increasing,” “Employment: Strong,” and “Input Prices: 66.4” indicates that demand expansion is outpacing supply capacity.

Future Development Process

If this correlation continues, the following spiral is expected:

1. Orders increase.

2. Companies increase hiring and capital investment.

3. Shortages of human resources, machinery, and logistics occur.

4. Wages, transportation, and raw material costs rise.

5. Companies implement price pass-throughs.

6. Inflation remains high.

7. The Fed implements additional interest rate hikes.

8. Housing, stocks, and bonds adjust due to rising interest rates.

9. Demand slows down.

10. Supply constraints are easing and inflation is falling.

We are currently positioned between ‘5 (Price Pass-through)’ and ‘7 (Fed Rate Hikes)’.

5. Three Scenarios for the US Economy

Scenario A: Soft Landing (Probability: approx. 35%)

The PMI falls to around 55, and crude oil prices stabilize. Supply capacity increases, leading to lower input costs. The Fed halts rate hikes, and long-term interest rates stabilize at 4.5–5%. Stocks shift toward a focus on earnings growth.

Scenario B: No Landing (Probability: approx. 45% / Most Likely)

The PMI remains between 55 and 60, and employment stays strong. Inflation remains high in the 3% range, and the Fed implements additional rate hikes. Long-term interest rates reach the 5% range, and while stock prices remain high, P/E ratios decline. Cyclical stocks, financials, and capital goods show relative strength.

Scenario C: Stagflation (Probability: approx. 20%)

While crude oil prices remain high, the PMI falls and consumption declines. Only inflation persists, and the economy worsens due to rate hikes. As a result, stocks, bonds, and real estate all face a difficult period simultaneously.

6. What Will Happen to Currencies?

US Dollar

The combination of a US PMI of 58.4, expectations of Fed rate hikes, and the US 10-year Treasury yield exceeding 5% provides strong support for the US dollar in the short term. Behind the strong dollar are ‘high US interest rates,’ ‘strength of the US economy,’ ‘demand for safe-haven assets,’ ‘global risk aversion due to high crude oil prices,’ and ‘higher growth rates than Europe and Japan,’ with the US Dollar Index exceeding 101.

Dollar-Yen

The dollar-yen exchange rate is heavily influenced by the interest rate differential between the US and Japan. While expectations for rate hikes are strong in the US, the Bank of Japan has raised its policy interest rate to 1.25%.

Currently, the following conflicting pressures are acting on the market simultaneously:

• Rising US interest rates: Stronger dollar, weaker yen

• BOJ rate hike: Stronger yen

• Japan’s fiscal instability: Weaker yen

• High crude oil prices: Deterioration of Japan’s trade balance (weaker yen)

• Falling US stocks: Unwinding of yen carry trades (stronger yen)

In our base scenario, although downward pressure on the yen is expected to remain in the short term, we anticipate significant volatility in price movements due to additional interest rate hikes by the Bank of Japan and the unwinding of yen carry trades.

Euro and Emerging Market Currencies

A strong US dollar acts as a headwind for the euro, Australian dollar, Asian currencies, and emerging market currencies. In emerging markets, in particular, the burden of repaying dollar-denominated debt increases. However, for resource-exporting countries, currencies may be supported by rising prices of crude oil, natural gas, and metals.

7. What will happen to stock prices?

US Stocks

While a rise in PMI is a tailwind for corporate earnings, rising interest rates directly push down the discount rate (valuation) of stock prices.

• Sectors with significant negative impact: High P/E tech, loss-making growth stocks, biotech, companies dependent on long-term profits, real estate, REITs, and small-cap growth.

• Relatively strong sectors: Finance, energy, capital goods, defense, semiconductor manufacturing equipment, companies with pricing power, and companies with stable cash flow.

AI and Big Tech

Although AI demand is robust, valuations are being pressured by rising interest rates. AI-related stocks will now be clearly categorized into ‘model developers,’ ‘GPUs/semiconductors,’ ‘power,’ ‘data centers,’ ‘security,’ and ‘business software.’ Simply being ‘AI-related’ will no longer be enough to attract buyers; companies will be strictly evaluated on revenue, profit, contract duration, GPU utilization rates, power contracts, and the certainty of investment recovery.

Japanese Stocks

For Japanese stocks, finance, trading companies, capital goods, machine tools, automation, semiconductor equipment, defense, and power infrastructure are relatively advantageous.

Yaskawa Electric, Fanuc, Okuma, DMG Mori, Misumi Group, Hitachi, Mitsubishi Electric, Advantest, Tokyo Electron, and others may ride the wave of US capital investment and supply capacity expansion. However, a sharp appreciation of the yen would act as a headwind for export-oriented companies.

8. What will happen to government bonds?

US Treasury Bonds

If the PMI is strong and input prices are high, yields will rise (prices will fall) due to expectations of additional interest rate hikes by the Fed.

• 2-year bonds: React sensitively to policy interest rates and rise (approx. 4.86%).

• 10-year bonds: Rise due to inflation, growth, and fiscal concerns (approx. 5.05%).

• 30-year bonds: Rise due to fiscal, inflation, and supply-demand factors (approx. 5.35%).

US Treasury bond prices are following a downward trend, but if the economy were to deteriorate rapidly, a scenario where short-term bonds are bought up sharply due to expectations of interest rate cuts is also conceivable.

Japanese Government Bonds

The yield on Japan’s 10-year government bond has reached 3%, marking its highest level since 1996. The background factors include ‘Bank of Japan rate hikes,’ ‘inflation,’ ‘fiscal anxiety,’ ‘supply and demand balance of long-term bonds,’ ‘increased yield requirements from foreign investors,’ and ‘caution regarding the weak yen.’

Japanese government bonds will no longer be in a phase where they are ‘bought unconditionally because they are safe assets.’ However, in the event of a severe economic recession or a sharp stock market decline, purchases by domestic financial institutions and pension funds will likely support the floor price.

9. What will happen to real estate?

US Real Estate

Rising interest rates put pressure on everything from mortgages and commercial real estate loans to REITs, construction, home sales, and refinancing. However, because there is a structural shortage of housing supply, housing prices will not necessarily crash immediately.

Going forward, the following polarization will further intensify.

• A decrease in the number of transactions and a slowdown in price appreciation.

• A decline in new buyers and difficulty in refinancing commercial real estate.

• Office vacancy rates remaining high.

• On the other hand, land for data centers is soaring.

Data Center Real Estate

Real estate for AI data centers shows movements completely different from general real estate. Important evaluation criteria include ‘power connection,’ ‘transformers,’ ‘cooling water,’ ‘telecommunications,’ ‘land,’ ‘power generation equipment,’ ‘tax systems,’ and ‘long-term tenants.’ Since land that can be directly connected to power is becoming extremely scarce, its value will continue to rise even in a high-interest-rate environment. On the other hand, the value of ‘just a box’ without a power contract will not rise.

Japanese Real Estate

In Japan, the Bank of Japan’s rate hikes will increase procurement costs for mortgages and real estate investment. On the other hand, ‘Tokyo housing demand,’ ‘inbound tourism,’ ‘redevelopment,’ ‘office demand,’ ‘data centers,’ ‘logistics facilities,’ and ‘rising construction costs’ will support the floor of real estate prices. It has been reported that the average price of a new condominium in Tokyo’s 23 wards rose to approximately 137.84 million yen in fiscal year 2025.

Moving forward, prime city-center locations, data centers, logistics, and areas with low housing supply will remain strong, while regional housing, old offices, low-occupancy commercial facilities, and investment properties vulnerable to rising interest rates will face strict selection.

10. Global Macroeconomy

The world is entering an era of ‘growth with inflation’

The global economy will never fully return to the low-inflation, low-interest-rate environment of the past. This is because structural inflationary factors such as geopolitical risks, de-globalization, supply chain duplication, defense spending, AI data centers, aging populations, labor shortages, energy transition, fiscal deficits, and disaster/climate response will remain.

Trends in each region

• North America: While the US has the strongest growth among developed nations, intense demand, high oil prices, supply shortages, and fiscal spending are pushing up inflation. From 2026 to 2027, “continued interest rate hikes,” “a strong dollar,” “high long-term interest rates,” “sector selection in stocks,” “stagnant housing,” and “strong capital investment” will become prominent. Canada will be linked to the US but will be strongly influenced by housing and resource prices.

• Europe: Growth rates are lower than in the US, and the region is dependent on energy prices, fiscal policy, manufacturing, and exports. High US interest rates and a strong dollar act as pressure for a weaker euro.

• China: Although domestic demand is weak, the country is forcibly increasing supply capacity in exports, EVs, solar power, batteries, AI, and manufacturing. US interest rate hikes and a strong dollar have the effect of supporting China’s export competitiveness.

• Emerging Countries: Polarization is progressing. While resource-exporting countries (such as Brazil) benefit from high oil, metal, and agricultural prices, energy-importing countries and those with dollar-denominated debt suffer from currency depreciation, inflation, rising interest rates, and debt burdens. India, Indonesia, and others will likely show relative strength due to domestic demand and demographics.

11. What structural changes will occur?

Reasons for realization (basis for continued high growth and high inflation)

• High PMI and robust new orders

• Increase in employment and strong need for capital investment

• Acceleration of investment in AI, defense, and semiconductors

• Supply chain restructuring and reshoring to the US

• Serious labor shortages and demand for infrastructure renewal

• Strong corporate pricing power

Reasons for non-realization (downside and stall risks)

• Consumption pressure due to high oil prices

• Deceleration of housing and capital investment due to high interest rates

• Decline in global demand due to tariffs

• Sharp rise in government bond yields due to fiscal deficits

• Corporate bankruptcies and deterioration of the credit market due to high interest rates

• Supply chain destruction due to geopolitical risks

• Possibility that the PMI figure is a temporary reaction

Probability of each event occurring

• Continued high growth and high inflation in the US: High

• Additional Fed rate hike in October: Moderate to high

• US 10-year Treasury yield settling in the 5% range: Moderate

• Maintenance of a strong US dollar: Moderate to high

• Sector selection in US stocks: Very high

• Slowdown in US housing transactions: High

• Rise in US data center real estate: High

• Additional rate hikes in Japan: High

• Dominance of Japanese financial and capital goods stocks: Moderate to high

• Global stagflation: Moderate

• Global re-acceleration of inflation: High

12. The Future in 2030, 2035, and 2040

2030

The US will continue with “high capital investment,” “high productivity,” “high fiscal deficits,” “high interest rates,” “a strong dollar,” and “concentrated investment in AI, defense, and power.” Companies will be judged not just on revenue growth, but on their ability to integrate and manage production capacity, hiring, automation, price pass-through, inventory, and power.

2035

Global supply chains will be completely multi-polarized and decentralized into “North America,” “Europe,” “China,” “India,” and “ASEAN.” As each region shifts to a structure where it self-supplies a certain level of semiconductors, batteries, food, energy, medical supplies, and defense, inflation rates will remain higher than in the 2010s.

2040

The global economy will have completed its shift from “cheap global supply chains” to “safe and redundant regional supply chains.” Although costs associated with structural transformation will arise, AI, robotics, data centers, renewable energy, nuclear power, and automation technologies will absorb and overcome the high-cost structure by maximizing productivity.

13. Quantitative Analysis (List of Key Data)

PMI Related

US Inflation Data (August 2026 CPI)

Key Interest Rate Indicators

• US Policy Rate: 3.75–4.00%

• US 10-Year Treasury Yield: around 5.05%

• US 2-Year Treasury Yield: around 4.86%

• US 30-Year Treasury Yield: Around 5.35%

• Bank of Japan Policy Rate: 1.25%

• Japan 10-Year Government Bond Yield: Approx. 3.0%

Data Center Power Consumption Outlook

• 2024: Approx. 460 TWh

• 2030: Approx. 945 TWh

• 2035: Approx. 1,300 TWh

14. BUSINESS OPPORTUNITY TOP 10

1. No. 1: Manufacturing Automation

   1. Directly solves the severe labor shortage and rising wages.

   2. Companies to Watch: Yaskawa Electric, FANUC, Okuma, DMG Mori, Omron

2. 2nd Place: Logistics and Warehouse Automation

   1. Overcoming rising transportation costs, labor shortages, and inventory deficits.

   2. Companies to Watch: Daifuku, Toyota Industries, SG Holdings, Nippon Yusen

3. 3rd Place: Production Management and Digital Twins

   1. Integrating and optimizing factory personnel, goods, equipment, and pricing digitally.

   2. Companies to Watch: OPTiM, Genetech, Arithmer, NTT DATA, Fujitsu

4. 4th Place: Power and Transmission Infrastructure

   1. Supporting AI data centers, new factories, and the shift to EVs from the ground up.

   2. Companies to Watch: Hitachi, Mitsubishi Electric, Fuji Electric, Meidensha, Toshiba, Ebara Corporation

5. 5th Place: Semiconductor Manufacturing Equipment

   1. Riding the wave of US manufacturing reshoring, AI, automotive, and edge AI demand.

   2. Companies to Watch: Tokyo Electron, SCREEN, Advantest, DISCO

6. 6th Place: Energy Efficiency

   1. Solutions to reduce soaring electricity and fuel costs.

   2. Companies to Watch: Daikin, Panasonic, Mitsubishi Electric, Omron, Nitto Denko

7. 7th Place: Price Optimization and Revenue Management (Dynamic Pricing)

   1. Achieving immediate price pass-through in line with rising material and labor costs.

   2. Companies to Watch: HEROZ, Arithmer, Fujitsu, NTT DATA, SAP

8. Rank 8: Human Resources and Skills Education

   1. Bridging structural reskilling and labor shortages.

   2. Companies to Watch: Recruit, Persol, Benesse, Schoo, and AI education firms

9. Rank 9: Finance and Insurance

   1. Improved margins due to rising interest rates and sophisticated credit risk management.

   2. Companies to Watch: Mitsubishi UFJ, Sumitomo Mitsui FG, Mizuho, Tokio Marine, SOMPO

10. Rank 10: Real Estate for Data Centers

    1. Development of high-value land with power connectivity and cooling facilities.

    2. Companies to Watch: NTT Urban Development, Mitsubishi Estate, Mitsui Fudosan, Digital Realty, Equinix

15. People Who Grow and People Who Decline

Things That Are Increasing (Tailwinds)

Industrial robots / Machine tools / Semiconductor equipment / Power grids / Data centers / Logistics automation / Price optimization / Human resources education / Finance / Energy efficiency / Defense / AI infrastructure / US capital investment / Japanese finance and capital goods

Things That Are Decreasing (Headwinds)

Import models relying solely on low prices / Labor-dependent logistics / Non-automated factories / Companies unable to pass on price increases / High P/E ratio loss-making companies / Real estate vulnerable to long-term interest rates / Low-occupancy offices / Debt-dependent startups

Companies with Potential for Profit

• Yaskawa Electric, Fanuc, Okuma, DMG Mori, Misumi, Daifuku: Directly benefiting from US production capacity expansion and severe labor shortages.

• Hitachi, Mitsubishi Electric, Fuji Electric, Meidensha, Ebara Corporation, Daikin: Capturing robust demand in the areas of power, cooling, data centers, and factory equipment.

• Advantest, Tokyo Electron, SCREEN, Disco: Benefiting from the reshoring of AI and semiconductor manufacturing to the US.

• Mitsubishi UFJ, Sumitomo Mitsui FG, Mizuho, Tokio Marine, SOMPO: Rising interest rates and financial digital transformation are tailwinds.

Industries that may face difficulties

Real estate vulnerable to high interest rates / Companies with high dependence on interest-bearing debt / Companies unable to pass on rising crude oil prices / Service industries unable to cope with labor shortages / Manufacturing industries focused solely on price competition / Companies with slow recovery of capital investment / Stocks bought solely on future growth expectations / Low-quality commercial real estate

16. Impact on Consumers

Prices

Upward pressure on crude oil, gasoline, electricity, transportation costs, and food prices will persist. On the other hand, as corporate investment in automation progresses, product and logistics costs may stabilize in the long term.

Housing

In the US, home purchases and transaction volumes will decrease due to soaring mortgage rates. In Japan, repayment burdens for variable-rate loans will increase following the Bank of Japan’s interest rate hikes. However, the shortage of housing supply, particularly in urban areas, will act as a price floor.

Employment

Overall employment opportunities will be maintained due to structural labor shortages. However, as companies advance automation, job categories such as manual labor, reception, data entry, and routine clerical work will rapidly decrease.

Financial Assets

Interest on deposits and yields on short-term bonds will rise, which is a tailwind for depositors and income investors. On the other hand, the valuation of long-term bonds, high-PER growth stocks, and real estate prices will continue to be in an environment where they are prone to decline.

17. HUNTER’S WILD IDEAS TOP 5

1st Place: Manufacturing Capacity as a Service (buying production capacity via subscription)

• Challenge: Wanting to secure factories, personnel, robots, and logistics capacity only during busy seasons or periods of rapid demand growth.

• Solution: Providing manufacturing equipment, AI control, skilled personnel, and logistics as a single package.

• Idea: Companies do not build or own their own factories, but purchase production capacity via subscription for the necessary period and volume.

2nd Place: PMI-linked “PMI Dynamic Loan”

• Challenge: Even for growth companies with rapidly increasing demand, there is a shortage of upfront funds for raw materials, inventory, and hiring costs.

• Solution: Directly incorporate real-time data such as PMI, new orders, backlogs, and input prices into loan underwriting models.

• Idea: A financial platform that provides fully automated, instant working capital loans to companies experiencing a surge in orders, based on backlog data.

3rd Place: “Inflation-Linked Salary Platform” to Defend Against Rising Prices

• Challenge: Even if nominal wages rise, if prices increase at a faster pace, real wages decline and talent leaves.

• Solution: Automatically link a portion of salaries to CPI, gasoline prices, housing costs, and regional price indices.

• Idea: Salary design software that adjusts for the rise in living costs in real time. Companies can retain top talent, and employees can defend against inflation risk.

4th Place: Fluidizing AI Computing Resources and Power with “Compute Power Futures”

• Challenge: The profitability of AI data centers is heavily influenced by fluctuations in electricity prices and GPU utilization rates.

• Solution: Create a futures trading market that integrates electricity, GPU computing power, cooling water, and data center capacity.

• Idea: AI companies can hedge future computing power (Compute) and required electricity prices simultaneously to stabilize costs.

5th Place: Personal Life Defense with “Personal Inflation Agent”

• Challenge: The average CPI announced by the government does not accurately reflect an individual’s actual increase in living costs.

• Solution: AI analyzes an individual’s spending history, local rent, food prices, and utility bills from multiple perspectives.

• Idea: An AI agent that calculates a “my-inflation rate” for each individual and automatically optimizes and suggests communication plans, insurance, mortgages, food purchasing patterns, and electricity contracts.

18. What to do next

Executives

• Indicators to watch: PMI, new orders, backlogs, employment, input prices, price pass-through rates, inventory, production capacity, equipment utilization rates, labor costs, electricity prices, and interest rates.

• Action: If input prices are higher than the PMI, sales growth will not translate into profit. Prioritize improving your company’s pricing power and productivity.

New Business Managers

• Markets to Explore: Automation, logistics optimization, dynamic pricing, power management, capital investment support, reskilling education, on-demand production, data center power, and interest rate/currency hedging services.

Engineers

• Technologies to Master: Industrial robots, digital twins, demand forecasting, inventory optimization, price optimization, power optimization, predictive maintenance, AI agents, IoT, logistics automation, energy-saving controls, and financial risk models.

Investors

• Indicators to Watch: US PMI, new orders, employment, input prices, CPI, core PCE, crude oil prices, US 2-year and 10-year bond yields, Fed Funds futures, dollar index, VIX, home sales, mortgage rates, Japan PMI, Japan PPI, BOJ policy, JGB 10-year yield, USD/JPY, and the divergence between TOPIX and the Nikkei 225.

General Consumers

• Action: Regularly review your mortgage (compare fixed vs. variable), electricity bills, gasoline, food, communication costs, and insurance. In a rising interest rate environment, it is important to increase your resilience to interest rate hike risks.

Conclusion

The US PMI of 58.4 signals not just an economic recovery, but the beginning of a “high-pressure economy” where demand exceeds supply capacity. With the Services PMI at 58.7, Manufacturing PMI at 57.0, and new orders at 58.2, input prices have surged to 66.4, as fuel, transportation, labor costs, raw materials, and supply chain constraints push inflation higher. This combination provides a tailwind of demand expansion for corporate profits, while presenting central banks with the difficult challenge of continuing interest rate hikes.

In the US, we expect a stronger dollar, rising US Treasury yields, adjustments in stocks and real estate sensitive to long-term interest rates, and an advantage for finance, energy, capital goods, and automation. In Japan, BOJ rate hikes and rising JGB yields will provide a tailwind for financial stocks, while exerting selection pressure on real estate and high-PER stocks. Conversely, US capital investment, semiconductor plants, power grids, logistics, and automation represent significant opportunities for Japanese companies.

The global economy is shifting from an era of low interest rates, low inflation, and cheap global supply chains to an era of “growth with inflation” driven by supply security, AI, re-industrialization, defense, power, and labor shortages.

⚠ [Disclaimer for this report]

This report is intended to provide information based on our own analysis and does not constitute investment advice. Please make investment decisions at your own risk. This scenario is based on probabilistic AI estimates and may differ from actual market trends. Furthermore, company names mentioned in this report are used for analysis and discussion as examples and do not guarantee or recommend the performance or future prospects of any specific company.