Japan July final manufacturing PMI at 5-month high of 51.2, suggests some Q3 recovery

[TOKYO] Japanese manufacturing activity expanded at the fastest pace in five months in July though not as much as initially expected, a private survey showed on Monday, suggesting economic growth may be slowly recovering after an expected second-quarter slump.

The final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) was a seasonally adjusted 51.2 in July, slightly below a preliminary reading of 51.4 but above a final 50.1 in June.

The index remained above the 50 threshold that separates expansion from contraction for the third consecutive month.

The final index for new orders was 50.9, returning to expansion but less than the preliminary reading of 51.3. In June, the new orders index was 49.6.

The output component of the PMI index was 52.2, little changed from a preliminary 52.3 and above 50.9 in June in a sign that output growth picked up.

The new export orders index, however, fell to 52.2 from 54.0 in the previous month in a sign that China's economic slowdown is continuing to hurt global demand. The flash estimate of new export orders was 52.3.

Japan's economy is seen growing an annualised 0.7 per cent in April-June, a Reuters poll of economists showed, though some market watchers believe it may have contracted.

That would be a slowdown from an annualised 3.9 per cent growth in January-March as consumer spending, exports and factory output weakened.

The economy is expected to expand an annualised 2.0 per cent in the current quarter, the poll showed, but some economists are worried about the strength of the recovery to disappointing consumer spending, which unexpectedly fell in June.

REUTERS