Tuesday , January 26 2021

Japan – shrinking production activity for the third month of listing

Japan's production activity shrank for the third consecutive month in July, although earlier than the month before, the previous results of the Markit survey showed. / Nikkei from Purchasing Directors.

Data released on Wednesday suggest a renewed boost in services in the service sector, which provides assistance to the Japanese economy in the context of the Sino-US trade conflict and diplomatic tensions between Tokyo and Seoul, which have shifted to commercial terrain.

The flash version of PMI in manufacturing was in July based on a seasonally adjusted basis of 49.6, which is significant after June (49.3).

However, it remains for the third consecutive month below the threshold of 50, which separates the contraction and expansion of the activity.

Industrial production and new orders fell again, underlining the pressures facing the Japanese economy, heavily dependent on exports to China and the United States.

"Weak demand from China remains a key factor in explaining the slow demand for Japanese products," says Joe Hayes, economist at IHS Markit, who is conducting the survey.

"With rising tensions between Japan and South Korea, there is an increased risk for the production supply chain in Japan, causing a further slowdown that the service sector could have to replace," he adds. – That's it.

According to separately published data, the flash version of the PMI index in July increased to 52.3 on a seasonally adjusted basis, compared with 51.9 in the last month.

This is the highest level since last February.

The composite PMI, which includes the manufacturing and services sectors, rose to 51.2 in June from 50 in June 2008 to 50.8. (Daniel Leussink, Jean Terzian for the French service)

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