While Asian markets rise broadly today, Nikkei is lagging with mild loss on fear of further showdowns. Prime Minister Yoshihide Suga warned that the government would consider declaring state of emergency for the Greater Tokyo metropolitan area, as coronavirus cases surged.

“Even during the three days of the New Year’s holidays, cases didn’t go down in the greater Tokyo area,” Suga said. “We felt that a stronger message was needed.” He added that in some regions like Osaka Prefecture and Hokkaido, shortening restaurant hours helped stem the rise in infections.

Japan PMI Manufacturing was finalized at 50.0 in December, up from November’s 49.0. Markit said output stabilized after 23 consecutive monthly falls. Also, employment rose for the first time since February.

Usamah Bhatti, Economist at IHS Markit, said:

“Japanese manufacturers signalled a broad stabilisation in operating conditions at the end of a tumultuous year, as the headline PMI registered at the 50.0 no-change threshold in December. This pushed the PMI to the highest level since April 2018 and ended a sequence of 19 straight declines – the longest in the survey history.

“The overall health of the Japanese manufacturing sector was boosted by output levels steadying following nearly two years of consistent declines. Although new orders reduced in the latest survey period, the fall was the softest recorded in the current sequence dating back to January 2019.

“Buoyed by improved operating conditions, Japanese manufacturing firms increased employment levels for the first time since February, albeit only fractionally. Nevertheless, ongoing issues of an ageing population have continued to hold back Japanese manufacturing employment, as firms report continued to report retirements.

“Businesses reported a sustained increase in optimism, with a third of respondents predicting a rise in output over the coming 12 months. This is in line with the IHS Markit forecast for industrial production to grow 7.3% in 2021.”

Full release here.