September 29, 2011 / 11:16 PM / 8 years ago

Japan Sept manufacturing PMI shrinks, first in 5 months

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TOKYO, Sept 30 (Reuters) - Japanese manufacturing activity contracted in September for the first time in five months as a strong yen hurt exports and domestic orders shrank due to weak domestic demand, a survey showed on Friday.

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 49.3 in September from 51.9 in August. The index fell below the 50 threshold that separates contraction from expansion for the first time since April, which was one month after a devastating earthquake in March.

The index for new export orders, a leading indicator of Japanese exports, fell to 44.9 from 48.0 in August to reach its lowest level since April, the data showed.

New orders within Japan fell to 48.0 from 53.5 in August, showing contraction for the first time since May.

“Japan’s manufacturing sector recovery stalled in September, with production falling for the first time in five months, in response to fewer new order intakes,” said Alex Hamilton, an economist at Markit.

“With the yen remaining strong and global demand conditions sluggish, exporters felt the brunt of the slowdown, with overseas sales falling at the sharpest rate since April.”

Japanese officials intervened unilaterally in the currency market and eased monetary policy on Aug. 4 as the yen approached a record high versus the dollar. This has slowed yen appreciation but hasn’t caused the currency to weaken significantly.

The output component of the PMI index fell to 49.0 from 52.2 in August, showing the first contraction in five months. (Reporting by Stanley White; Editing by Chris Gallagher)

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