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Japan PMI May 2023

Japan: Composite PMI reaches near 10-year high in May

The au Jibun Bank Composite Purchasing Managers’ Index (PMI) came in at 54.9 in May, up from April’s 52.9. May’s result was the best since October 2013. Consequently, 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 came in at 50.8 in May, up from April’s 49.5 and marking the first print above 50 in seven months. Lastly, the services PMI rose to 56.3 in May (April: 55.4).

In the services sector, output grew at the fastest rate in nearly 10 years, and new orders and employment also grew at a speedier pace. The sector benefitted from international tourism and the loosening of Covid-19 curbs. In the manufacturing sector, output and new orders rebounded, while employment grew at a weaker pace. The sector benefitted from the easing of supply chain difficulties, with delivery times decreasing for the first time since January 2020. Looking at prices, input inflation fell in the manufacturing sector but rose in the services sector, while output inflation fell in both sectors. Finally, business sentiment dimmed in both sectors.

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