Japan Factory Sector Expands First Time In 10 Months: Markit

Activity in the Japanese manufacturing sector increased for the first time in ten months in March, helped mainly by a strong rebound in export demand, data from a survey by Markit Economics and the Japan Materials Management Association (JMMA) showed.

The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector rose to 50.4 n March from 48.5 in February, rising above the no-change 50 mark - which separates growth from contraction - for the first time since May 2012.

Production at Japanese factories increased for the first time in ten months, though at a modest rate. The upturn in output mainly reflected a renewed expansion of new orders, in part due to the strongest export performance recorded in more than two years. New business recorded growth for the first time in ten months.

Meanwhile, staffing levels in the manufacturing sector declined at the fastest pace since July 2009, underpinned by lower staffing requirements at consumer and investment goods producers.

Average input prices faced by goods producers rose for the third successive month, and hit the highest level in one-and-half years. Meanwhile, output prices decreased further during March, reflecting strong competition for new business, data showed.

"There was evidence that the recent weakness of the yen provided a boost to manufacturers in March as output and new orders both returned to growth during the month," Andrew Harker, Senior Economist at Markit, said.

"A further cause for concern was a faster reduction in employment, although this trend may begin to change should workloads continue to rise in coming months."

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