Japan's manufacturing activity gains steam
Tokyo reports rise in factory figures for seventh month before decision on higher sales tax
Japanese manufacturing activity expanded last month at the fastest pace since a record earthquake and nuclear disaster in 2011, a survey showed yesterday, suggesting the economy has been able to stage a full recovery because of strong domestic demand and recovering exports.
It remained above the 50 threshold that separates contraction from expansion for the seventh consecutive month and showed that activity expanded at the fastest since February 2011, one month before the natural disaster struck the northeast coast.
The output component of the index also rose, to 53.8 from 53.5, to show the fastest growth since the earthquake.
The encouraging numbers, coming just before Premier Shinzo Abe issues his long-awaited decision on raising sales taxes, followed a slip in August, when tepid export and consumer demand at home brought down industrial production by 0.7 per cent from July.
That drop - reversing a 3.4 per cent rise in July - was one of the last pieces of economic data that Tokyo will be able to study before issuing a decision today on whether to raise the sales levy, a move some fear will derail the fledgling economic recovery. Also due today are household spending data and the central bank's quarterly tankan survey, a widely watched indicator of confidence in the corporate sector.
A corporate survey included in the data yesterday showed manufacturers have a bright outlook, with the sector expecting a 5.2 per cent growth for last month and 2.5 per cent this month.