Japan’s manufacturing sector inched closer to expansion in December, purchasing managers index data showed on Monday, while the service sector expanded during the month, albeit at a slower pace from November.
The S&P Global flash Japan Manufacturing PMI rose to 49.7 in early-December from 48.7 in the prior month, with the sector aided by some improvements in local and foreign demand for industrials and automobiles.
S&P analysts said the December reading suggested that the manufacturing sector may be set for more stable conditions in the coming months. The sector was roiled by a series of automobile scandals this year, which disrupted production, while higher U.S. trade tariffs also weighed on overseas demand.
More recently, a prolonged diplomatic spat with China is also expected to curb Chinese demand for Japanese goods.
Growth remained largely skewed towards the services sector, with the flash Japan services PMI reading 52.5 in December, compared to 53.2 in the prior month. The services sector has been a key driver of Japanese business activity in recent months, helping offset weakness in manufacturing.
The S&P flash Japan composite PMI fell slightly to 51.5 in December from 52.0 in November.
Source: Investing