JP: PMI Manufacturing Index

Sun Jan 03 19:35:00 CST 2016

Actual Previous
Manufacturing - Level 52.6 52.6

December's manufacturing PMI reading was unchanged at 52.6. New orders increased at a rate that matched October's one-year high. This supported further expansions in output, employment and buying activity. Meanwhile, input prices increased at a historically weak rate, while charges declined slightly.

Growth in new orders increased at the joint-fastest rate in 14 months in December. Greater demand stemmed from new product launches and advertising campaigns. At the sector level, both consumer and investment goods producers indicated marked growth in new work intakes. Supporting total new order growth was a rise in international demand, as new exports expanded for the third consecutive month. Stronger foreign demand was attributed by some firms to greater trade volumes with Taiwan and Southeastern Asian countries.

The Markit/JMMA Japan Manufacturing PMI is a composite index based on five of the individual indexes: New Orders, Output, Employment, Suppliers' Delivery Times and Stock of Items Purchased. The Delivery Times Index is inverted so that it moves in a comparable direction.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.