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Japan's Private Sector Downturn Continues In February

Japan's private sector downturn continued in February despite the recovery in manufacturing activity, flash survey data from IHS Markit showed Friday.

The au Jibun Bank composite output index rose to 47.6 in February from 47.1 in the prior month. However, a score below 50 indicates contraction in the sector.

The headline manufacturing Purchasing Managers' Index rose to 50.6 in February from 49.8 in January. Meanwhile, the services PMI declined to 45.8 from 46.1 in January.

Positive sentiment stemmed from hopes that an end to the coronavirus disease 2019 (COVID-19) pandemic would induce a recovery in domestic and foreign demand, Usamah Bhatti, an economist at IHS Markit, said.

Nonetheless, disruption caused by the pandemic is likely to remain in the immediate future, the economist added.

Marcel Thieliant, a Capital Economics economist, said the rebound in the composite PMI in February supports the assessment that the economy is coping with the second state of emergency better than most had anticipated.

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