Flash PMIs for the month
- Manufacturing 48.8 vs. prior 48.9 (December is the 8th consecutive month in contraction)
- Services 50.6 vs. prior 50.3
- Composite 49.8 prior 49.8
The commentary accompanying the report is dour, but reference to the stimulus package suggest maybe better is to come. Maybe:
- "Latest survey data showed that the Japanese economy remained stagnant in December, following on from a similar outturn in November. Taking fourth quarter survey data as a whole, the poor performance in October could see Japan's economy dip into contraction.
- "The most disconcerting takeaway from fourth quarter survey data has been the marked loss of momentum in the service sector, which alongside domestic consumption, has been a key driving force of the economy in 2019, negating much of the manufacturing malaise. It is now clear that the service sector is unable to offset the industrial weakness, which does not bode well for growth prospects in 2020.
- "That said, the recent stimulus package launched by Abe has the potential to breathe life back into the domestic economy. Indeed, this will certainly alleviate pressure on the Bank of Japan to take immediate policy action if the economic outlook worsens."
The Bank of Japan meet this week. On hold expected given the announcement last week of the extra stimulus.
Yen not moving.
