Japan PMI Manufacturing was finalized at 48.8 in January, a slight increase from December’s 48.4. But contracted has continued since last May. Output and new orders recorded further declines. Export demand dipped, but downturn shows signs of easing. On the positive side, business confidence hits highest level since August 2018.
Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said:
“Manufacturing PMI data for Japan are still portraying a struggling industry, causing firms to cut back production for another month due to subdued demand and global uncertainties.
“Scratching beneath the surface and we find that the capital goods sector was a particular straggler, with data here showing sharp and accelerated reductions in production and new orders. Falling demand for capital goods does not bode well for the global economic outlook, nor for Japanese exports.
“That said, business optimism showed real signs of promise for 2020, with new product launches and expectations of greater global demand helping to lift sentiment to a near one-and-a-half year high. Manufacturers of intermediate goods, which include electronic components, reported a particularly sharp rise in optimism, serving as an early signal of the positive impact receding global trade frictions will have on the industrial economy.”
