Japan manufacturing activity rebounds in May

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Activity across Japanese factories picked up in May with the preliminary JMMA-Markit PMI gauge rising to a three-month high of 50.9. The gauge printed at 49.9 in April, slightly below the 50 level that separates expansion from contraction.

In PMI surveys a reading above 50 indicates activity is expanding.


Mirroring the improvement in the headline figure the internals of the report were reasonable if not spectacular.


Output and new orders, having fallen in April, increased while new export orders and employment growth both accelerated at a faster pace than previously reported.

On the price front, always an important factor to consider given the extraordinary monetary measures being implemented by the Bank of Japan, costs for finished goods were unchanged after falling previously while prices for raw materials grew at the slowest pace seen in the past 29 months.

Here’s Markit economist Amy Brownbill on the May report.

“Reflective of an overall improvement in operating conditions at Japanese manufacturers was a return to growth of both production and new orders in May. Moreover, the rates of expansion were faster than their respective long-term averages. Subsequently, employment rose at the quickest rate since December last year, while buying activity increased for the third time this year so far. Meanwhile, input prices increased at the weakest rate in the current 29-month sequence of inflation, while charges stabilised, following a three-month period of decline.”

The improvement in manufacturing activity follows the release of GDP figures on Wednesday that revealed the Japanese economy expanded at a 2.4% annualised rate in the March quarter.