Japan manufacturing PMI for November 49.0 versus 49.0 previous

Japan’s factory activity fellin November at its fastest pace in eight months due to soft demand, prompting firms to reduce production.

Manufacturing PMI:

• The final au Jibun Bank Japan manufacturing PMI fell to 49.0 in November, the lowest since March, down from 49.2 in October.
• The index stayed below the 50.0 threshold (indicating contraction) for the fifth consecutive month.
• The subindex for new orders continued contracting but at a moderate pace compared to October.
• It has remained below the 50 break-even mark for 1.5 years, reflecting sustained weak demand.
• Exports: New export orders declined for the 33rd consecutive month, highlighting subdued demand both domestically and overseas.

Other details showed:

• Weak Demand Impact:

  • Firms reduced output due to weak demand, especially in the semiconductor and automotive sectors.
  • Output fell at its fastest pace since April.
  • Employment shrank for the first time in nine months.

• Input Costs and Pricing:

  • Input cost pressures remained strong, driven by higher prices for labor, logistics, and raw materials, particularly from abroad.
  • Output price inflation reached its highest level since July, as firms raised selling prices to protect margins.

• Inflation Data:

  • Core consumer inflation in Tokyo accelerated in November, staying above the Bank of Japan’s 2% target.
  • This sustained market expectations for a near-term interest rate hike.

• Business Outlook:

  • Despite weak demand, manufacturers remained positive about their outlook, with confidence reaching a three-month high.
  • Optimism was supported by hopes for new product launches and a broad economic recovery.

This article was written by Greg Michalowski at www.forexlive.com.