Japan reports 10-month low in June factory output

TOKYO, Japan: In June, Japan’s manufacturing activity grew at the slowest pace in the past 10 months, a worrisome sign for an economy struggling to recover from the COVID-19 pandemic.

As a weakening yen caused a surge in import costs, the country’s services sector also expanded at a slower rate, raising concerns of subdued local demand and its impact on the economy.

In June, the au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) dropped to a seasonally adjusted 52.2 from 52.7 in June, the slowest expansion since September last year.

Overall, private sector activity was marginal, said Usamah Bhatti, economist at S&P Global Market Intelligence, which compiles the index.

“The expansion in output was the softest recorded since March. Companies noted that shortages of raw materials and rising energy and wage costs had increasingly dampened output and new order inflows,” Bhatti added, as quoted by Reuters.

“This was notably evident at manufacturers, who recorded a reduction in production levels for the first time in five months,” he added.

In June, the au Jibun Bank Flash Services PMI Index dropped to a seasonally adjusted 51.2, compared with May’s final of 54.0, expanding for the fourth consecutive month.

Meanwhile, the au Jibun Bank Flash Japan Composite PMI, which considers both manufacturing and services, fell to 50.6 from a final of 53.0 in May.

Disclaimer: This report is automatically generated from worldwide news services. NTN is not responsible for its content and does not moderate it.

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