Flash PMIs from Japan, Jibun Bank / Markit, July 2019
- Manufacturing49.6, a slight improvement from June's prior 49.3
- Services prior 52.3 from 51.9
- Composite 51.2 from prior 50.8
Comments from Markit:
'Trends witnessed in the Japanese private sector so far in 2019 were more-or-less maintained at the start of the third quarter. Composite 'flash' data for Japan show a modest improvement in private business output in July, with consumption of services supporting the economy, as it has done in the year-to-date. Overall private sector output expanded at the fastest pace in seven months on the back of faster growth in services activity. 'The manufacturing sector's plight continued, however, where production was cut in July for the seventh successive month Weak demand from China remained a key factor behind sluggish demand for Japanese goods Heightened frictions between Japan and South Korea also add downside risk to the manufacturing supply chain in Japan, creating additional slack that services may once again have to compensate for."
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The focus in Japan is turning to the BOJ meeting next week. While the Bank is not expected to add any further easing measures they do seem likely to downgrade their view for inflation ahead (again) which could very well lead to further easing at the next or thereafter meeting.
