Japan July manufacturing activity, new orders slow: final PMI

FILE PHOTO: Workers ride bicycles as a guard looks on at a factory in Keihin industrial zone in Kawasaki, south of Tokyo August 31, 2010. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - Japanese manufacturing activity slowed less than initially reported in July, a revised survey showed on Wednesday, but there are lingering concerns about the economy due to the reduced pace at which new orders increased.

The final Markit/Nikkei survey for Japan showed the manufacturing Purchasing Managers’ Index (PMI) was a seasonally adjusted 52.3. That was an upward revision from the flash reading of 51.6, which was the lowest in more than one and a half years. In June, the index was 53.0.

The index remained above the 50 threshold that separates expansion from contraction for the 23rd consecutive month.

“Latest survey data signaled a slowdown to manufacturing sector growth at the beginning of Q3,” said Joe Hayes, economist at IHS Markit, which compiles the survey.

“Output growth eased and there was a noticeable softening of demand, while export sales failed to record any upswing for a second month running.”

The final index for new orders was 50.9, the lowest since October 2016. The July flash reading was 50.1 and the final one for June was 52.7.

The index for new export orders was 50.0, compared with the preliminary 49.7 and above a final 48.9 in June.

Washington is engaged in a heated dispute with China over Beijing’s trade surplus with the United States, and there are worries President Donald Trump’s administration could ask Japan to take concrete steps to lower its trade surplus as well.

Japan’s economy is expected to rebound in the second quarter from a contraction in the first quarter that ended the longest growth streak since the 1980s bubble economy. Many economists say trade protectionism is the biggest risk to the outlook.

Reporting by Stanley White; Editing by Richard Borsuk