July 29, 2010 / 11:17 PM / 10 years ago

Japan July manufacturing PMI falls to 4-month low

(For more stories on the Japanese economy click [ID:nECONJP])

TOKYO, July 30 (Reuters) - Japanese manufacturing activity expanded in July at its slowest pace in four months, a survey showed on Friday, as overseas demand slackens following a rapid recovery earlier this year.

The Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 52.8 in July from 53.9 in June, the lowest level since 52.7 in March.

The index remained above the 50 threshold that separates contraction from expansion for the 13th consecutive month.

The output component of the PMI index declined to 53.8 from 55.9 in June, which is the slowest pace of growth in output in 13 months as some companies tried to sell down their inventories due to uncertainty about the strength of the global economy.

“These results suggest that the expansion of manufacturing output is easing off gradually against a backdrop of slower growth in new orders,” said Minoru Nogimori, an economist at Nomura Securities.

“We expect exports, particularly to Asia, to remain firm and the improvement of manufacturing to continue for some time yet, albeit at a slowing pace.”

The index for new export orders, a leading indicator of Japanese exports, fell to 55.4 in July from 56.9 in the previous month, indicating the slowest pace of growth in five months. (Reporting by Stanley White)

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