August 30, 2010 / 11:18 PM / 9 years ago

Japan August manufacturing PMI lowest in 14 months

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TOKYO, Aug 31 (Reuters) - Japanese manufacturing activity expanded in August at its slowest pace in 14 months, a survey showed on Tuesday, as overseas demand ebbed while a strong yen weighs down the nation’s exports.

The Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 50.1 in August from 52.8 in July, the lowest level since 48.2 in June 2009.

The index remained above the 50 threshold that separates contraction from expansion, however, for a 14th consecutive month.

The index for new orders, the largest contributor to the decline in the overall PMI, fell to 48.0 from 53.6, its lowest since the May 2009 reading of 47.7, reflecting widespread uncertainty over the global economy.

“We attribute the deterioration in new orders to weakness in external demand,” said Minoru Nogimori, economist at Nomura Securities.

“We see the recent strength of the yen, trending around 85 yen against the dollar, as having a negative impact on exports.”

The output component of the PMI index slipped to 51.3 from 53.8, its slowest pace of expansion since 50.6 in June 2009.

The index for new export orders, a leading indicator of Japanese exports, fell to 50.9 from 55.4 in the previous month, its slowest pace of expansion since the May 2009 figure of 49.8. (Reporting by Kaori Kaneko; Editing by Edmund Klamann)

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