{"id":168468,"date":"2022-12-16T03:27:41","date_gmt":"2022-12-16T03:27:41","guid":{"rendered":"https:\/\/precoinnews.com\/?p=168468"},"modified":"2022-12-16T03:27:41","modified_gmt":"2022-12-16T03:27:41","slug":"japan-dec-factory-activity-contracts-at-fastest-pace-in-26-months","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/japan-dec-factory-activity-contracts-at-fastest-pace-in-26-months\/","title":{"rendered":"Japan Dec factory activity contracts at fastest pace in 26 months"},"content":{"rendered":"
TOKYO (Reuters) – Japan\u2019s manufacturing activity shrank at the fastest pace in more than two years in December on soft demand and persistent cost pressures, a corporate survey showed on Friday.<\/p> While service-sector output rebounded on a tourism reopening, weak factory activity has blurred Japan\u2019s recovery prospects as companies enter labour talks, in which wage hikes are deemed essential for post-pandemic economic growth.<\/p>\n The au Jibun Bank Flash Japan Manufacturing Purchasing Managers\u2019 Index (PMI) was down to a seasonally adjusted 48.8 in December from a final reading of 49.0 in the previous month.<\/p>\n The index was below the 50-mark that separates contraction from expansion for a second month and marked the sharpest decline since October 2020\u2019s 48.7.<\/p>\n \u201cManufacturing firms continued to struggle in the face of subdued demand conditions and severe inflationary pressures,\u201d said economist Laura Denman at S&P Global Market Intelligence, which compiles the survey.<\/p>\n Output and new orders extended their contraction for a sixth month in December, although at slower paces than last month. Input price inflation rate slowed for a third month to the lowest pace since September 2021.<\/p>\n Meanwhile, service-sector activity grew on a tourism reopening, with the sub-index gauging its demand from overseas rising to the highest since September 2019.<\/p>\n The au Jibun Bank flash services PMI rose to a seasonally adjusted 51.7 in December, from the previous month\u2019s 50.3 final, the survey showed.<\/p>\n With subdued manufacturers and robust services, the au Jibun Bank Flash Japan composite PMI stood on the break-even line of 50.0, up from a final 48.9 last month.<\/p>\n \u201cThe divergence between the manufacturing and services sectors has grown further,\u201d said Denman, citing the government\u2019s discount program for domestic tourists as an additional positive factor for the service-sector firms.<\/p>\n The growing disparity was also evident in the Bank of Japan\u2019s latest business survey released on Wednesday, which found manufacturers\u2019 mood soured for a fourth consecutive quarter while service firms\u2019 sentiment hit its highest since late 2019.<\/p>\n