Japan’s factory activity expands at strongest pace in 4 years: PMI

[TOKYO] Japan’s manufacturing activity expanded at its strongest pace in four years in April as firms boosted production over concerns about potential supply shortages due to rising tensions in the Middle East, a private-sector survey showed on Thursday (Apr 23).

The S&P Global flash Japan Manufacturing Purchasing Managers’ Index (PMI) rose to 54.9 in April, the highest since January 2022, from 51.6 in March. The 50-mark separates growth from contraction.

A key sub-index for factory output recorded the strongest increase since February 2014, driven by worries over future supply shortages linked to escalating tensions in the Middle East.

Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said: “There were reports that some manufacturing firms boosted output due to concerns and uncertainty surrounding the war in the Middle East and the potential for further supply chain disruptions.”

Service sector activity slowed, with the flash Japan services PMI falling to 51.2 in April, the slowest rise in 11 months, from 53.4 in March.

Price pressures intensified across Japan’s private sector, with input costs rising at the sharpest rate since January 2023. Average output charges increased at the quickest pace since composite data were first available in late 2007.

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Business confidence weakened for a second straight month and fell to its lowest since August 2020 during the Covid-19 pandemic.

The flash Japan composite PMI, which combines manufacturing and services activities, slipped to 52.4 from 53 in March, as a slower rise in services activity offset gains in the manufacturing sector. REUTERS