Japanese Manufacturing Cools to Seven-Month Low on Delta, Supply Constraints

Source: au Jibun Bank

Japanese manufacturing slowed for the second consecutive month in September, hitting the lowest level in seven months. EWJ is down 1.02% premarket.

• The headline au Jibun Bank Japan Manufacturing Purchasing Managers Index eased to 51.5 from 52.7 in August, still above the 50.0 expansion threshold.
• The latest reading is the second straight month of moderation, and the lowest reading since February 2021.
• Data showed that firms started to feel the impact of the resurgence of the COVID-19 pandemic due to the spread of the Delta variant and supply constraints.
• Output fell for the first time since January, as production was hit by the rise in COVID-19 cases and the pandemic restrictions, as well as raw material issues.
• New orders also fell for the first time in nine months, with the pace of decline the fastest in 10 months due to weak client confidence in the domestic market.
• Producers remained optimistic that the challenges would lift in the near term and were even more confident for the coming year in hopes of the pandemic end.