Japan factory activity returns to growth after 11-month contraction, PMI shows
Photographer: Kiyoshi Ota/Bloomberg
TOKYO: Japan's manufacturing activity returned to growth in June after nearly a year of contraction, but demand conditions remain murky due to worries over U.S. tariffs and the global economic outlook, a private-sector survey showed on Monday.
Meanwhile, the service sector's expansion accelerated, pushing overall business activity to a four-month high, offering a counterbalance to the export-reliant factory sector amid diminished prospects for an early Japan-U.S. trade deal.
The au Jibun Bank flash Japan manufacturing purchasing managers' index (PMI) rose to 50.4 from May's final 49.4, ending 11 months of readings below the 50.0 threshold that indicate contraction.
Among sub-indexes, factory output and stocks of purchases rebounded to growth from multi-month contraction, driving up the headline manufacturing PMI.
However, new orders for manufactured goods, including from overseas customers, continued to decline, the survey showed.
"Companies indicated that U.S. tariffs and lingering uncertainty over the global trade outlook continued to inhibit customer demand," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence, which compiled the survey.
Manufacturers' confidence about their year-ahead output remained mostly unchanged from May.
By contrast, the au Jibun Bank flash services PMI increased to 51.5 in June from 51.0 in May, thanks to new business growth, although growth for export businesses slowed slightly.
Combining both manufacturing and service activity, the au Jibun Bank flash Japan composite PMI rose to 51.4 in June from May's 50.2, reaching its highest level since February.
Cost pressures across the private sector eased in June, with input prices rising at the slowest rate in 15 months, though output price inflation accelerated to a four-month high, the composite data showed.
Employment was another bright spot, with workforce numbers increasing at the quickest pace in 11 months across both manufacturing and services sectors. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Indonesia cuts outlay on giant free meal plan
Planned spending on the programme is now forecast at 350 trillion rupiah next year. — AFP JAKARTA: Indonesia has trimmed spending plans for what could still be the world's second-most expensive free meal programme, offering modest relief from fiscal pressures as President Prabowo Subianto advances a host of big-ticket projects. Planned spending on the programme, which targets reaching 83 million people in the coming months, is now forecast at 350 trillion rupiah next year after officials revised ingredient cost estimates lower by a third, said Dadan Hindayana, head of the newly created National Nutrition Agency. That marked a 22% drop from spending plans earlier this year. This year's expenditures are expected to total about US$7.5bil, Hindayana said in a recent interview. That represented a 29% reduction from prior plans. The recalibration of the five-days-a-week programme, aimed at improving health outcomes for students, children under five, and pregnant or breastfeeding women in the world's fourth-most populous nation, could ease some investor concerns about Indonesia's budget deficit outlook. — Bloomberg
Malay Mail
an hour ago
- Malay Mail
Over 2,100 food items in Japan to get pricier in July amid cost pressures
TOKYO, June 30 — Some 2,105 food items in Japan will see price hikes in July, driven by surging raw material costs along with higher labour, logistics, and utility expenses, according to a report by Teikoku Databank, reported Xinhua. As companies pass the rising costs onto consumers, the total number of food products set for price increases in 2025 has reached 18,697 and may surpass 20,000 as early as July, according to the report. A survey of 195 major food manufacturers revealed that seasonings such as curry roux and soup stock account for the most hikes at 1,445 items. Confectionery items, including chocolates and gum, will also rise in price, with some seeing reduced content. Processed foods like rice products and pasta sauces are also affected. The most common reason cited for the hikes was higher raw material costs, followed by labour costs, the highest since data collection began in 2023. Teikoku Databank warned that further tensions in the Middle East could push up crude oil, edible oil, and wheat prices, possibly leading to even broader price increases. — Bernama-Xinhua
The Star
3 hours ago
- The Star
Trump says car trade with 'Mr Japan' is unfair as deadline looms
FILE PHOTO: A Toyota Tacoma is seen during the New York International Auto Show, in Manhattan, New York City, US, April 5, 2023. - Reuters WASHINGTON DC: US President Donald Trump characterised trade in cars between the US and Japan as unfair on Sunday (June 29), little more than a week before higher tariffs are set to kick in if a deal isn't reached between the two nations. "So we give Japan no cars. They won't take our cars, right? And yet we take millions and millions of their cars into the United States. It's not fair,' Trump said during a Fox News interview that aired Sunday. "And I explained that to Japan. And they understand it. And we have a big deficit with Japan. And they understand that too,' he said in remarks. "Now, we have oil. They could take a lot of oil. They could take a lot of other things,' he added. Japan's top negotiator Ryosei Akazawa visited Washington DC last week for the seventh round of trade negotiations that have been ongoing for months, even extending his stay in hopes of hashing out a deal as the July 9 deadline for higher so-called reciprocal tariffs looms. In a statement released by the Japanese government Sunday, Akazawa and his counterpart, US Commerce Secretary Howard Lutnick had a "fruitful discussion' and agreed to continue seeking a deal that is beneficial for both the US and Japan. It was unclear from Trump's statements in the interview whether Japan was close to reaching a deal or winning an extended reprieve from a jump in the across-the-board tariffs. Trump said the US can set its trade terms with Japan unilaterally. "I'm going to send letters,' Trump said on Sunday, referring to a plan to inform some trading partners that the US will unilaterally set tariffs. "I could send one to Japan. 'Dear Mr. Japan, here's the story. You're going to pay a 25 per cent tariff on your cars.'' - Bloomberg
