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Japan PMI March 2023

Japan: Composite PMI hits highest reading since June 2022 in March

The au Jibun Bank Composite Purchasing Managers’ Index (PMI) came in at 51.9 in March, up from February’s 51.1. March’s result marked the best reading since June 2022. As such, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in private sector operating conditions compared to the previous month.

The Manufacturing PMI stood at 48.6 in March, up from February’s 47.7. Lastly, the services PMI activity index increased to 54.2 in March (February: 54.0).

In February, business conditions improved in the services sector for the seventh month running and deteriorated less in the manufacturing sector for the first time in five months. Services sector activity increased by the greatest amount since October 2013, boosted in part by China reopening from Covid-19 restrictions. Employment in the sector also grew at a sharper rate. Manufacturing sector activity benefitted from supply chains normalizing: Output and new orders declined at a weaker rate. Less positively, employment in the sector grew at a weaker rate. Looking at prices across both sectors, input inflation fell, and output inflation rose. Finally, business sentiment improved in both sectors.

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