Japan: Manufacturing PMI continues to trend up in July
July 22, 2016
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) edged up from June’s revised 48.1 (previously reported: 47.8) to 49.0 in July. July’s print marked the highest reading in four months. Despite the increase, the index remains below the 50-threshold that separates expansion from contraction in the manufacturing sector.
July’s print reflected that, despite remaining below the 50-threshold, output, new orders and stocks of purchases improved over the previous month. Moreover, employment increased at a faster rate. Nevertheless, overall, manufacturing activity remains depressed by a strong yen and negative spillovers from the two earthquakes that hit the Kyushu region in April. Nikkei analysts added that, “international demand fell at the sharpest rate in over three-and-a-half years, with many panellists blaming the appreciation of the yen leading to a reduction in global competitiveness. On a more positive note, the stronger yen/dollar rate helped to ease inflationary pressures as input prices decreased at the fastest rate since November 2009.”