June 29, 2010 / 11:16 PM / 10 years ago

Japan June manufacturing PMI falls but near 4-yr high

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TOKYO, June 30 (Reuters) - Japanese manufacturing activity declined in June but remained near its highest level in almost four years, a survey showed on Wednesday, suggesting a recovery in factory output has weathered Europe’s sovereign debt crisis.

The Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 53.9 in June from 54.7 the previous month, which was the highest in almost four years.

The index dropped for the first time in five months but has remained above the 50 threshold that separates contraction from expansion for 12 straight months.

The index for new export orders, a leading indicator of Japanese exports, fell for the second consecutive month to 56.9 in June from 57.5 in May. The export orders index has also stayed above the 50 threshold for 13 months, suggesting external demand will continue to grow.

“The continued high level of new export orders suggests that exports will remain solid,” said Minoru Nogimori, an economist at Nomura Securities.

“While some have been concerned about the impact on the Japanese economy of financial market disruption triggered by European fiscal troubles, so far that impact appears to have been small, and we expect the Japanese manufacturing sector to continue to improve for a while.”

The output component of the PMI index declined to 55.9 from 57.2 in May, its first fall in three months. (Reporting by Stanley White; Editing by Edwina Gibbs)

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