Japan October manufacturing PMI hits 18-month low on weak exports

Japanese manufacturing activity in October contracted at its fastest pace in 18 months, a survey showed on Wednesday, as falling exports and slowing domestic demand weighed on output.

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 46.9 in October from 48.0 in September.

The index remained below the 50 threshold that separates contraction from expansion for a fifth consecutive month.

“Latest survey data are consistent with manufacturing production contracting at a quarterly rate of just over 3 per cent,” said Paul Smith, senior economist at Markit.

“Sub-par industry performance continues to be closely linked with underlying export weakness.”

The index for new export orders inched up to 46.7 in October from 46.3 in the previous month, showing new export orders have contracted for the fifth consecutive month.