Japan Private Sector Contraction Continues in September, But Up from August

Source: IHS Markit

Japan’s private sector activity continued to contract in September, even as the latest figures indicate an improvement from the previous month. EWJ is down 0.36% premarket.

• The Flash Composite index stood at 47.7 in September, below the 50.0 threshold that separates expansion and contraction. This compares with 45.5 in August.
• The Services Business Activity Index climbed to 47.4 from 42.9, while the Manufacturing Output index slipped to 48.1 from 51.0.
• The latest figures indicate that private sector businesses were scaled back in September as output slipped for the fifth straight month, albeit at a slower pace.
• Manufacturers recorded the first output drop for the year, with input prices growing at a 13-year high due to higher raw material and staff costs and supply issues.
• IHS Markit Economist Usamah Bhatti said disruptions to activity are likely to remain until the latest wave of COVID-19 infections and restrictions are addressed.
• Japanese firms are optimistic that business conditions in the year ahead would improve, with sentiment higher than the previous year.