Factory Surveys Showing Economic Softness

China’s manufacturing activity hit a three-month low in August, raising the case for fresh policy steps to keep growth on track, while a Reuters poll showed Japan’s economic recovery is likely to be modest despite a small acceleration in the factory sector.

Surveys conducted by HSBC/Markit and Reuters highlighted fragility in recovery of the world’s second- and third-largest economies at a time when policymakers try to walk a fine line between supporting growth and pushing structural changes.

The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index (PMI) fell to 50.3 in August from July’s 18-month high of 51.7, badly missing a Reuters forecast of 51.5 but still hovering above the 50 threshold that separates expansion from contraction.

Reuters

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