Japan’s economy slows

 EmailPrint This Post Print This Post

While the Nomura/JMMA Purchasing Managers Index for July continues to signal expansion in Japan’s manufacturing sector, the Index fell for the second consecutive month to 52.8%. According to Markit, the rate of expansion in manufacturing production was the slowest in more than a year.

The PMI number points to a probable slowdown in Japan’s economy in the second quarter. I expect Japan’s GDP to be 1.0% higher than the first quarter or 4.1% quarter on quarter annualised compared to 5% in the first quarter. On a year-ago basis Japan’s GDP has probably slowed to 3.5% from 4.2% in the first quarter.

Sources: Markit; Dismal Scientist; Plexus Asset Management.

With Japan a major trading partner of China, the number does not augur well for the July CFLP China Manufacturing PMI to be released on Monday, especially as August tends to be a weak month seasonally.

Sources: Li & Fung; Plexus Asset Management.

I will not be surprised if these numbers cause some duress in equity markets while mature-market bonds see further safe-haven buying.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.

OverSeas Radio Network

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>




Top 100 Financial Blogs

Recent Posts

Charts & Indexes

Gold Price (US$)

Don Coxe’s Weekly Webcast

Podcast – Dow Jones

One minute - every hour - weekdays
(requires Windows Media Player)
newsflashr network
National Debt Clock

Calendar of Posts

August 2010
« Jul Sep »

Feed the Bull