Japan: Manufacturing PMI falls to an over-three-year low in April following Kyushu earthquakes

The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) declined from March’s 49.1 to 48.0 in April. The print marked the lowest reading since January 2013 and, as a result, the index is dipping further below the 50-threshold that separates expansion from contraction in the manufacturing sector.

April’s print signals that the two earthquakes that hit the Kyushu region in mid-April has had a disruptive effect on manufacturing as the region is an important hub for the semiconductor and automotive industries. Nikkei analysts added that, “Manufacturing conditions in Japan worsened at a sharper rate in April. Both production and new orders declined markedly, with total new work contracting at the fastest rate in over three years. The sharp drop in total new work was underpinned by the fastest fall in international demand since December 2012, and following the two earthquakes on the island of Kyushu (one of Japan’s key manufacturing regions), the outlook of the goods-producing sector now looks especially uncertain.”