TOKYO Aug 21 Japanese manufacturing activity
accelerated in August as export and domestic demand increased, a
preliminary survey showed on Thursday, offering hope that
economic growth is getting back on track after slumping in the
wake of a sales tax increase in April.
The Markit/JMMA flash Japan Manufacturing Purchasing
Managers Index (PMI) rose to a seasonally adjusted 52.4 in
August, up from a final reading of 50.5 in July.
The index remained above the 50 threshold that separates
expansion from contraction for the third straight month and
showed the fastest expansion since March.
The figures could ease fears that manufacturers would scale
back production after seeing inventories pile up following the
The output component of the flash PMI index rose to 53.2
from a final 49.8 in July.
The new orders index surged to 54.4 from 51.2, indicating
domestic demand is picking up momentum.
The index for new export orders also rose to a preliminary
53.0 from 50.8 in July, showing that Japan's economy could get
an added boost as overseas demand strengthens.
Employment also rose at a faster rate.
Data on Wednesday showed Japan's exports rose in July for
the first time in three months in a tentative sign that global
demand is starting to recover, raising hopes that exports can
offset sluggish consumer spending.
The economy shrank an annualised 6.8 percent in April-June,
its biggest slump since the March 2011 earthquake, stoking fears
that consumer spending had weakened more than expected due to
the April tax hike.
While a bounce was expected in the second half of the year
as the impact of the tax increases fades and consumers start
buying again, the plunge in GDP and uncertain export outlook
have cast doubt on the strength of such a recovery.
The flash PMI index is based on approximately 85 to 90
percent of total survey responses each month, and is the
earliest available indicator of manufacturing sector operating
conditions in Japan.
The final Markit/JMMA PMI for August will be released on
(Reporting by Stanley White; Editing by Kim Coghill)