TOKYO, Sept 24 (Askume) – Japan’s factory activity fell in September as production slowed, a survey showed on Tuesday, although further expansion in the services sector supported overall business momentum.
o The Jibun Bank Flash Japan manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 in September from 49.8 in August.
The index remained below 50.0, the threshold for expansion and contraction, for the third consecutive month.
The production sub-index declined slightly in September compared to August, while the decline in the new orders sub-index also slowed.
Surveys show that input and output price growth has slowed.
Data earlier this month showed Japan’s annual wholesale inflation slowed in August as a stronger yen weighed on import costs.
Producer confidence remained sluggish in September, with the production outlook index falling to its lowest level since December 2022.
Askume Tankan, which closely tracks the Bank of Japan’s quarterly business survey, showed this month that morale at Japan’s major manufacturers fell to a seven-month low in September amid weak demand from China.
The au Jibun Bank preliminary services PMI rose to 53.9 in September, up from August’s 53.7 and the highest in five months. The survey showed average input prices rose at the slowest pace since March, but Japanese services prices rose as companies passed on more costs to customers.
“Business activity expansion in September remained driven by services,” said Osama Bhatti, economist at S&P Global Market Intelligence, which compiles the survey.
“Although overall average operating expenses remain at historically high levels, cost pressures on both manufacturing and service companies have eased.”
The AU Jibun Bank Japan Composite PMI data, which combines manufacturing and service sector activity, showed a reading of 52.5 in September, rising for a third consecutive month.
The Bank of Japan kept interest rates steady on Friday, as widely expected, after ending negative interest rates in March and raising short-term interest rates to 0.25% in July.
