Japan July flash manufacturing PMI rises as domestic orders increase

[TOKYO] Japanese manufacturing activity in July expanded at the fastest pace in five months, a survey showed on Friday, suggesting economic growth is picking up after an expected slump in the second quarter.

The flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.4 in July from a final 50.1 in June.

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

The index for new orders rose to a preliminary 51.3 from a final 49.6 in the previous month, which probably explains the recent data showing firms are becoming more confident about increasing capital spending.

The output component of the PMI index rose to 52.3 from 50.9 in June.

The new export orders index, however, fell to 52.3 from 54.0 in the previous month, which again supports evidence of fitful global demand as China's growth rate stays on low gear.

Japan's economy is seen growing an annualised 0.7 per cent in April-June, a Reuters poll showed.

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.

REUTERS