Japan PMI Manufacturing dropped to 49.5 in June, down from 49.8, and missed expectation of 50.0. Markit noted there was the fastest drop in new orders since June 2016. However, there was resilient output trend as manufacturers reduce backlogs of work to greatest extent since January 2013.
Commenting on the Japanese Manufacturing PMI survey data, Tim Moore, Associate Director at IHS Markit, which compiles the survey, said:
“June survey data reveals a further loss of momentum across the manufacturing sector, as signalled by the headline PMI dropping to a three-month low. Softer demand in both domestic and international markets contributed to the sharpest fall in total new orders for three years. A soft patch for automotive demand and subdued client confidence in the wake of US-China trade frictions were often cited by survey respondents.
“Disappointing sales volumes also led to the largest accumulation of finished goods inventories for over six-and-a-half years. At the same time, backlogs of work were depleted to the greatest extent since January 2013, which will likely act as an additional drag on production volumes in the months ahead.”
