There's finally signs of life in Japan's manufacturing sector

Yoshikazu Tsuno/ AFP/ Getty Images

Activity levels across Japan’s manufacturing sector improved for the first time in seven months in September, albeit by the smallest of margins.

The Nikkei-Markit flash manufacturing purchasing managers’ index (PMI) rose by 0.8 points to 50.3 in September, marking the first time since February that the index printed above the 50 level.

A figure above 50 points to an expansion in activity levels while a number below that indicates a contraction, so the higher the number the better. The flash estimate comes one week ahead of the final reading, and captures responses from around 85-90% of firms surveyed.

At 50.3, it basically says activity levels were unchanged from a month earlier. Nothing to shout home about, but an improvement on the levels seen earlier this year nonetheless.

Fitting with the subdued headline figure, the internal components were also mixed.

Output levels increased at a faster pace, as did employment growth. After contracting in August, new export orders also grew. That was offset by a decline in new orders, purchase quantities and continued weakness in both input and output prices. Unfortunately for the Bank of Japan, there’s few signs of inflationary pressures, at least in the industrial sector.

The table below from Markit shows how each individual subcomponent fared during the month.

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