Japan PMI Grows in December

Japanese manufacturing activity showed sustained growth in December, a survey showed on Monday, suggesting domestic demand continues to recover after the economy fell into a surprise recession last year.

The final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) was 52.0 in December, slightly less than a preliminary reading of 52.1 and unchanged from the final reading in November.

It remained above the 50 threshold that separates contraction from expansion for the seventh consecutive month.

The output component of the PMI index was 52.5, less than a preliminary reading of 53.3 and slightly below 52.7 in November.

New export orders rose for a sixth straight month but at a slightly slower pace than in November.

The economy unexpectedly slipped into recession in the third quarter of last year as a sales tax increase in April hit consumer spending harder than expected, while exports were uneven for most of the year.

However, the economy is expected to have resumed expansion in the fourth quarter as consumer spending recovered and companies increased capital expenditure.

Late in December, Japan’s government approved stimulus spending worth $29 billion aimed at helping the country’s lagging regions and households with subsidies, merchandise vouchers and other steps, though analysts are skeptical about how much it can spur growth.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza