The manufacturing sector in Japan continued barely to expand in June, the latest Nikkei Manufacturing PMI showed on Wednesday, with a score of 50.1.
That was up from last month's preliminary reading of 49.9, although it was down significantly from 50.9 in May.
The index also remained just barely above the boom-or-bust level of 50 that separates expansion from contraction.
"The rate of improvement in operating conditions at Japanese manufacturers slowed in June. Production growth weakened alongside a decline in new work intakes. According to anecdotal evidence, a reduction in capital investments and challenging economic conditions led to the recent contraction in total new orders," Markit economist Amy Brownbill said.
The rate of improvement in operating conditions at Japanese goods producers weakened in June. Production growth slowed to a fractional pace, while new orders returned to contraction territory.
In contrast, new export orders increased at the fastest pace since December 2013, with reports of a favorable exchange rate helping to improve price competitiveness. Meanwhile, input prices increased, albeit at a historically muted pace, while charges rose for the second straight month.
As a result of weaker production requirements and subdued demand conditions, buying activity was scaled back in June. However, the rate of decline was marginal.
Employment, on the other hand, remained in modest growth territory for the third month running. Meanwhile, new export orders rose at the quickest pace in one-and-a-half years in June.
On the price front, purchasing costs rose, amid reports of the deprecation of the yen against the dollar driving up raw material costs.
"In contrast, international demand strengthened in June, as new export orders increased at the fastest pace in one-and-a-half years. A number of panelists mentioned favorable exchange rates helping to improve price competitiveness, while others mentioned greater sales volumes with China and Europe," Brownbill said.
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