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Japan Manufacturing Weakens Early Q3 / 2018

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JAKARTA – Japan’s manufacturing activity weakened in July to its highest level in the last 1.5 years due to reduced exports.

It also raises concerns that the intensity of global trade wars is beginning to hurt the world’s major exporting countries.

The Japan Purchasing Managers’ Index (PMI) released by the Markit / Nikkei showed a slowdown to the level of 51.6, down by 2.6% compared to the previous month.

Although the achievement is still above the 50 level, which marks the expansion, but its value has dropped to its lowest level since November 2016.

“Data from this preliminary survey shows a slowdown in growth momentum for the Japanese manufacturing sector at the beginning of the third quarter of 2018, after performing so well so far,” Joe Hayes, IHS economist at Markit who conducted the survey, told Reuters on Tuesday (24/7).

He explained that the level of new business also grew weak and flat, while export demand is also eroded due to the depreciation of the yen lately.

The index for new demand fell to 50.1 from 52.7 in June, or the lowest since September 2016.

Meanwhile, exports shrank for the second month in a row to 49.7 from 48.9 in June.

Overall, the results of this initial PMI index show a gloomy outlook as US trade tensions with major trading partner countries also threaten exports from the State of Sakura.

A poll conducted by Reuters earlier this month also showed that Japanese business sentiment fell in July, which expressed concerns about the impact of the US-China trade gap.

In fact, Japan’s economy is expected to regain strength after contracting in the first quarter of 2018. However, exports do not seem to be able to recall Japanese economic expansion,

In addition, the company is now also preparing to cut its bsnis investment if the US continues to find a way to pressure Japan to reduce its trade surplus with the US.

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