Japan's Factory Contraction Slows in December: Reuters PMI

Japan's manufacturing sector continued to contract in December, but at a slower pace than in November, according to a private-sector survey released Monday by S&P Global Market Intelligence.

The final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) edged up to 49.6 in December, marking the softest contraction in three months. However, the index remained below the 50.0 threshold for the sixth consecutive month, indicating ongoing contractionary conditions within the sector.

"The headline reading moved closer to neutrality amid softer reductions in both production and new order intakes," noted Usamah Bhatti of S&P Global Market Intelligence.

The production subindex, while still showing shrinkage for the fourth straight month, recorded a slower contraction compared to November. Manufacturers cited subdued new orders as the primary driver of the decline in output.

New orders, a key indicator of future demand, contracted for the 19th consecutive month, reflecting weak demand both domestically and in key overseas markets. Some survey respondents suggested that weakness in the semiconductor market was contributing to the decline in new orders.

Despite the overall contraction, employment expanded in December, reversing November's decline and reaching its highest level since April. Companies cited labor shortages and preparations for future demand as key factors behind the hiring increase.

Input prices rose at the fastest pace since August, driven by higher raw material costs, labor costs, and the impact of the weak yen. To offset these rising costs, manufacturers raised output prices at the fastest rate in five months.

Despite the challenges, manufacturers expressed confidence about their future outlook, expecting business expansion driven by the launch and mass production of new products.## Japan's Factory Sector Shows Signs of Stabilization: Reuters

The contraction of Japan's factory activity eased in December, showing signs of stabilization after months of decline, according to a private sector survey released Monday by S&P Global Market Intelligence, and reported by Reuters.

The final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) rose to 49.6 in December, marking the softest contraction in three months. However, the index remained below the 50.0 threshold for the sixth consecutive month, indicating ongoing contractionary conditions within the sector.

"The headline reading moved closer to neutrality amid softer reductions in both production and new order intakes," said Usamah Bhatti of S&P Global Market Intelligence, to Reuters.

While the production subindex recorded shrinkage for the fourth straight month, the contraction was slower than in November. Manufacturers cited subdued new orders as the primary driver of the decline in output. New orders, a key indicator of future demand, contracted for the 19th consecutive month, reflecting weak demand both domestically and in key overseas markets. Some survey respondents suggested that weakness in the semiconductor market was contributing to the decline in new orders.

Despite the overall contraction, employment expanded in December, reversing November's decline and reaching its highest level since April. Companies cited labor shortages and preparations for future demand as key factors behind the hiring increase.

Input prices rose at the fastest pace since August, driven by higher raw material costs, labor costs, and the impact of the weak yen. To offset these rising costs, manufacturers raised output prices at the fastest rate in five months.

Despite the challenges, manufacturers expressed confidence about their future outlook, expecting business expansion driven by the launch and mass production of new products.