Japan final September factory PMI shows fastest expansion in activity in four months

FILE PHOTO: A worker cycles near a factory at the Keihin industrial zone in Kawasaki, Japan, March 8, 2017. REUTERS/Toru Hanai/File Photo

TOKYO, (Reuters) - Japanese manufacturing activity in September expanded at the fastest pace in four months, a revised survey showed on Monday, as domestic and export orders picked up in a sign of strengthening economic momentum.

The Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 52.9, versus a preliminary 52.6 and a final 52.2 in August.

The index remained above the 50 threshold that separates expansion from contraction for the 13th consecutive month and reached the highest level since May.

“September data signaled further improvement to the Japanese manufacturing sector, led by strong increases in output and new orders,” said Joe Hayes, economist at IHS Markit, which compiles the survey.

“Stronger international client demand provided a key source of growth, as shown by export sales expanding at the quickest pace in seven months.”

The final index for new export orders rose to 53.5, more than the preliminary reading of 53.1 and above a final 51.3 in the previous month, highlighting how Japan’s economy has benefited from an upturn in global demand this year.

That was underscored further by the new orders index rising to 53.4, versus a preliminary 52.5 and more than the 51.9 in August.

The PMI survey follows recent government data showing rising exports, industrial production and a mild rebound in consumer spending, raising confidence the economy will continue to grow at a health clip.

Japan’s economy expanded at an annualized 2.5 percent in the second quarter, marking the sixth consecutive quarter of growth, as consumer and company spending picked up.

Reporting by Stanley White; Editing by Shri Navaratnam