Japan’s manuf. PMI falls to 49.1 in July

Japan’s manufacturing sector contracted in July to 49.1 from 50.0 in June, indicating a slight decline in the sector’s health for the first time since April, according to the final au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI).

The decline was primarily driven by a sharp reduction in new orders at the beginning of the third quarter of 2024, with the pace of decline accelerating from June, marking the sharpest drop in four months.

Panellists noted subdued demand from both domestic and international markets. This led to ongoing declines in total new orders for 14 months and new export business for 29 months.

The sub-50.0 PMI reading in July was also influenced by a decline in output levels. This decrease was due to production adjustments made in response to lower demand, although it was only a slight decrease.

Despite the contraction, business sentiment remained positive, with firms expressing optimism about a broader economic recovery that could lead to increased new orders and business expansion.

Attribution: au Jibun Bank Japan Manufacturing PMI