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Japan PMI June 2021

Japan: Composite PMI falls further into contractionary territory in June

The Jibun Bank Composite Purchasing Managers’ Index (PMI)—which combines the PMIs of the services and manufacturing sectors—fell to 47.8 in June according to a flash reading, dropping from May’s final figure of 48.8. As such, the reading moved further below the 50-threshold, and therefore indicated a second consecutive deterioration in operating conditions from the prior month.

The services PMI rose to 47.2 in June from 46.5 in May, as output fell at a more moderate rate. Conversely, on the manufacturing side, the PMI dropped to 51.5 in June from 53.0 in the month prior. The reading reflected easing new order growth and a decline in output, but nonetheless marked the fifth consecutive month of improving conditions.

Commenting on the outlook, Usamah Bhatti, economist at IHS Markit, reflected:

“Despite the ongoing pandemic-related restrictions on the Japanese economy, private sector businesses were optimistic that business conditions would improve in the year ahead, and to a greater extent than that seen in May. Positive sentiment stemmed from expectations that the accelerating vaccination programme would contribute to an easing of restrictions and trigger a broad-based recovery in demand in both domestic and international markets.”

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