Japan Manufacturing PMI Slips To 48.8 In December - Jibun

The manufacturing sector in Japan continued to contract in December, and at a faster pace, the latest survey from Jibun Bank revealed on Friday with a manufacturing PMI score of 48.8.

That's down from 49.0 in November and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

Amid ongoing reports of muted customer demand, both output and new orders fell solidly, but at slightly softer rates than in November, and input buying declined at the quickest pace since September 2020. Firms, however, remained positive about output levels over the coming year, albeit with sentiment dropping to the weakest level in eight months. More positively, firms signaled some further easing in price pressures, as indicated by the rates of input cost and selling price inflation slowing to 15- and nine-month lows, respectively.

The survey also showed that the services PMI rose to 51.7 from 50.3 and the composite index climbed to 50.0 from 48.9.

The boost in tourism volumes, largely supported by the National Travel Discount Program, has reportedly encouraged recent service sector growth. Panel members also mentioned that a sustained COVID-19 recovery has improved consumer confidence. In terms of prices, inflation across a broad range of inputs led an accelerated rise in input costs. In response to increasing cost burdens, service providers raised their selling prices at the fourth fastest pace in the series history.

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