Japan: Manufacturing PMI falls to eight-month low in February on strong yen
February 22, 2016
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) declined from January’s revised 52.3 (previously reported: 52.4) to 50.2 in February. As a result, the index is now sitting just above the 50-threshold that separates expansion from contraction in the manufacturing sector.
February’s print suggests that the recent appreciation of the yen and struggling global demand both have taken its toll on manufacturers’ sentiment. Nikkei analysts added that, “latest data indicated only marginal growth in operating conditions at Japanese manufacturers. Production increased at the slowest rate in the current 10-month sequence of expansion, led by a marginal drop in new orders for the first time since June last year. Data suggests that the fall in total new work intakes was caused primarily by a contraction in international demand, with new exports declining at the sharpest rate in three years. Consequently, employment growth eased to a five-month low and buying activity was cut back from January’s 23-month peak.”