Japan’s industrial activity records its biggest drop in more than 2 years -PMI

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Japanese factory activity fell in December at the steepest pace in 26 months, a private sector survey showed on Wednesday, with businesses posting further declines amid a global economic slowdown.

au Jibun Bank’s Japanese manufacturing purchasing managers’ index (PMI) fell to 48.9 points seasonally adjusted in December from 49.0 at the end of November.

Although slightly higher than a previous estimate of 48.8 points, the reading was the weakest since October 2020 and marked the second month below the 50 line separating contraction from expansion.

“The slowdown was largely focused on the current demand environment, which is weak both internationally and domestically,” said Laura Denman, an economist at S&P Global Market Intelligence, which compiled the survey.

Production and new orders extended their contraction for a sixth month in December, but at a slower pace than last month, the survey’s sub-indices showed.

While the survey showed input price inflation was cooling to a 15-month low, indicating a lessening of cost pressures, the rest of the results pointed to a darker outlook for Japanese companies in early 2023.

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