Manufacturing operations in Japan recorded the fastest rate of improvement in November in more than seven years, while output grew at its sharpest since September 2009, riding on rising foreign and domestic demand, the purchasing managers’ index, or PMI, released by Markit-JMMA on Friday, showed.
Manufacturing PMI rose to 55.1 in November, up from 54.2 in October, indicating the strongest performance in operating conditions since July 2006. November also marked the ninth straight month of expansion in factory activity, with the index staying above the no-change 50.0 reading.
“New export orders, buoyed by the weak yen, hit a 42-month growth high in November,” Claudia Tillbrooke, a Markit economist, said in a statement. “If the pace of this expansion is maintained into 2014, it may serve to compensate for the expected weakening of consumer demand following April’s scheduled consumer tax hike. Exports could be further bolstered by the outcome of the Trans-Pacific Partnership deal, due to conclude in December.”
Meanwhile, Japan’s annual inflation rate in October was pegged at 1.1 percent, same as in September, while monthly inflation in October was up 0.1 percent from the previous month, suggesting that the country has a long way to go before it achieves the 2 percent yearly inflation target set by the Bank of Japan, or BoJ, for 2015.
The minutes of October’s BoJ meeting released earlier this week showed the central bank’s officials are not entirely optimistic about achieving the inflation target, with Takehiro Sato, a member of the monetary policy board, insisting that the final statement note that the consumer price index is facing downward pressure.
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Industrial production in Japan grew 4.7 percent on a year-on-year basis in October -- slower compared to September, when a 5.1 percent expansion was reported. On a monthly basis, industrial output grew 0.5 percent in October, reversing a decline of 0.9 percent in the previous month, but missed consensus expectations of a 2 percent growth.
The unemployment rate was pegged at 4 percent in October, slightly above expectations of 3.9 percent, but same as the jobless rate recorded in the previous month, data released by the Japan Statistics Bureau showed.
Household spending rose 0.9 percent on a yearly basis in October, as analysts had expected, but significantly lower than a 3.7 percent growth recorded in the previous month.