TOKYO (Reuters) - Japanese manufacturing activity expanded at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak, a preliminary survey showed on Friday.
The Markit/Nikkei Japan Manufacturing flash Purchasing Managers Index (PMI) rose to 53.8 in November on a seasonally adjusted basis from a final reading of 52.8 in October.
The reading remained above the 50 threshold that separates expansion from contraction for the 15th consecutive month and marked the fastest expansion since March 2014.
“New orders increased strongly, underpinned by business
from abroad amid recent yen weakness,” said Joe Hayes, economist at IHS Markit, which compiles the survey.
“New export orders expanded at the fastest pace in almost four years.”
The flash index for new export orders rose to 54.5 from a final 52.3 in the previous month to reach the highest since December 2013, helped by recent weakness in the yen.
The index for total new domestic and export orders jumped to the highest since March 2014.
The output component of the PMI index also rose to the highest since March 2014.
Input prices rose at a much faster pace than October, fueled by higher material prices and the cheaper yen, but the survey suggested manufacturers were only able to pass on a small portion of the hefty cost rises to their customers.
Japan’s economy grew in the third quarter to post the longest streak of uninterrupted growth in more than a decade.
Most of the growth in the third quarter came from exports as consumer spending fell and capital expenditure slowed. However, economists say consumption and business investment will start to accelerate soon and expect domestic demand to drive growth in the future.
Reporting by Stanley White; Editing by Kim Coghill