Japan Jibun Manufacturing PMI, final reading comes in at a dour 48.9
- vs. preliminary 48.8, previous 50.1
Japan’s factory activity contracted in July, with the S&P Global Manufacturing PMI falling to 48.9 from 50.1 in June, confirming a return to decline after briefly stabilising. The final reading was nearly unchanged from the flash estimate of 48.8.
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Key driver: Weaker domestic and external demand pulled output lower, with production shrinking at the fastest pace since March.
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New orders continued to decline, though the pace eased slightly.
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Employment rose, but hiring slowed to a three-month low.
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Input cost inflation eased to a 4.5-year low, while output prices rose at their fastest pace in a year as firms passed on costs.
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Business confidence improved to a six-month high, aided by hopes for stronger demand and easing trade tensions following the new Japan-U.S. trade deal, which lowers tariffs to 15% from a previously threatened 25%.
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Yesterday we had the Bank of Japan announcing no change to its 0.5% short-term policy rate, a move widely expected.
Governor Kazuo Ueda upgraded the bank’s inflation forecast to 2.7%, citing higher food prices and the economic lift from the recent trade deal with the U.S.
The yen briefly strengthened, before losing ground. This data is nudging the yen just a few ticks higher, not a lot in it. Its around 150.67, down from an early high above 150.75.