au Jibun Bank’s Japan flash Jan manufacturing PMI rises to 54.6

Nurluqman Suratman

24-Jan-2022

SINGAPORE (ICIS)–au Jibun Bank’s flash manufacturing purchasing managers’ index (PMI) for Japan rose to 54.6 in January from 54.3 in December but the recent surge in local COVID-19 cases is weighing on sentiment, the Japanese bank said on Monday.

A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction.

The flash January reading signals the strongest improvement in operating conditions since January 2018, au Jibun Bank said in a statement.

Both output and new order growth quickened last month, with the latter rising at the fastest pace for nine months, the bank said.

“Manufacturers remained confident regarding the health of the sector and continued to take on additional staff, as indicated by a further moderate increase in employment,” it said.

“Though firms remained strongly optimistic regarding the 12-month outlook for output, positive sentiment dipped to a five-month low,” the bank said.

Japan is currently facing a record number of daily COVID-19 infections, with over 50,000 cases reported on Sunday, according to local media reports.

Japan earlier reported a record of over 54,000 cases on 22 January.

Tokyo reported 9,468 new cases of COVID-19 on Sunday, a day after the daily figure went over the 10,000-threshold for the first time ever.

The Japanese government is expected to place more prefectures under a quasi-state of emergency, according to Kyodo News.

Tokyo and 12 other prefectures were added to regions subject to the quasi-emergency measures on 21 January after three prefectures – Hiroshima, Yamaguchi and Okinawa  – were placed under the measures from 9 January.

The COVID-19 restrictions are slated to be in place until 13 February in Tokyo and the 12 prefectures.

“Private sector firms reported that the surge in COVID-19 cases from the more transmissible Omicron variant had hindered client confidence, most notably in customer-facing industries across the service sector as restrictions were re-introduced across various prefectures including the capital Tokyo,” said Usamah Bhatti, an economist at financial information services provider IHS Markit.

Focus article by Nurluqman Suratman

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