Japan's Manufacturing PMI Drops to 50.1 in August Hits 14-Month Valley

A survey jointly released by Nomura Securities and the Japan Materials Management Association (JMMA) on Tuesday (August 31) showed that due to adverse factors such as overseas demand cooling and Japanese yen appreciation impacting Japanese exports, Japan’s manufacturing activity in August was The weakest in the past 14 months.

Data show that Japan's adjusted manufacturing purchasing managers' index (PMI) fell to 50.1 in the August quarter, compared with 52.8 in July, and August was the lowest since June 48.2. However, the index remained above the 50-year-old watershed in the 14th consecutive month.

The sub-indices were all bleak. The PMI new orders index fell from 53.6 to 48.0, falling below the 50-key level and the lowest since May 2009, suggesting that the general uncertainty of the global economy has inhibited product demand. The output index fell from 53.8 to 51.3, the lowest since June 2009. The new export order index fell to 50.9 from 55.4 in the previous month, the lowest since May 2009.

According to Minoru Nogimori, an analyst at Nomura Securities, “We believe the deterioration of new orders is due to the weak external demand. The USD/JPY has recently consolidated near 85, and the strong yen has had a negative impact on exports.”