Nikkei / Markit manufacturing PMI is in expansion, 50.3

  • preliminary 50.0
  • prior was 52.6 in December

key points via Markit:

  • hits 29-month low
  • New export orders decline at sharpest pace since July 2016
  • Business confidence falls for eighth month running

Joe Hayes, Economist at IHS Markit, which compiles the survey:

  • "Japan Manufacturing PMI data brought bad news for the global trade cycle at the start of 2019, with new export orders falling at the sharpest rate in two-and-a-half years.
  • Anecdotal evidence suggested that sales of goods relating to semiconductors had particularly suffered, which bodes ill for other Asian exporters.
  • Meanwhile, domestic markets also showed signs of frailty as total demand declined for the first time since September 2016.
  • With Abe set to levy the consumption tax this year, and Sino-US trade tensions still lurking, domestic weakness in Japan further adds to already existing challenges. Business sentiment continued to drop, with survey data registering an eighth straight month where confidence has slipped. Falling inventories and cut backs to production suggest that manufacturers are bracing for further economic difficulty."

Not a great report, but not in contraction, yet, anyway.