Moneycontrol Be a Pro
Get App
you are here: HomeNewsWorld
Last Updated : Sep 24, 2019 08:26 AM IST | Source: Reuters

Japan September factory activity shrinks most in seven months, new orders contract: PMI

The Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) slipped to a seasonally adjusted 48.9 from a final 49.3 in the previous month, marking the quickest pace of deterioration since February.

Japanese manufacturing activity shrank at the fastest pace in seven months in September, underscoring the broadening economic impact of the Sino-U.S. trade dispute and keeping policymakers under pressure to step up stimulus.

The Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) slipped to a seasonally adjusted 48.9 from a final 49.3 in the previous month, marking the quickest pace of deterioration since February.

The index stayed below the 50.0 threshold that separates contraction from expansion for the fifth straight month, pressured by a combination of trade frictions, Brexit uncertainty and political upheaval in Hong Kong.

Close

The key activity gauges in the PMI survey painted a bleak picture of the manufacturing sector, and no doubt will bolster expectations for the Bank of Japan to add to its massive stimulus.

The BOJ is already moving in that direction. At its policy review last week, the central bank warned about overseas risks and signalled the chance of more support measures as early as its next policy meeting in October.

The PMI showed factory output and total new orders both contracted for the ninth straight month, while the backlog of work dropped to a level not seen since late 2012.

"Anecdotal evidence further highlighted the strong external headwinds Japanese manufacturers were faced with, namely U.S.-China trade tensions, the Hong Kong protests, Brexit and the diplomatic dispute between Japan and South Korea," said Joe Hayes, economist at IHS Markit, which compiles the survey.

On the brighter side, a separate survey showed Japanese service activity expanded, in a sign resilient domestic demand might provide some support to an economy facing significant drag from frail manufacturing. Yet, pockets of weakness in the services industry highlighted the growing strains across businesses.

The Jibun Bank Flash Japan Services PMI fell slightly in September, expanding at a pace of 52.8 on a seasonally adjusted basis, compared to a final 53.3 in the previous month.

Though new orders increased at a slightly quicker pace than in August, employment declined for the first time in nearly three years, while future output expectations moderated to a more than two-year low.

The Jibun Bank Flash Japan Composite PM that includes both manufacturing and services slipped to 51.5 from 51.9 in August.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Sep 24, 2019 08:19 am
Loading...
Sections
Follow us on
Available On