Abstract:Japan’s Business Activity on the Decline – Services Sector Contracts More Severely
Manufacturing activity across Japan posted the weakest increase seen since five months during July as the nation faces severe challenges from the latest resurgence of COVID-19 cases which are forcing the government to extend restrictions and hamper economic recovery. The au Jibun Bank Flash Japan Manufacturing PMI dipped to a seasonally adjusted 52.2 in the month of July from Junes final reading of 52.4, but managed to hold above the 50-threshold indicating expansion.
The lower reading was driven by growth in output and new orders falling to the lowest levels seen in six months, on account of the spike in fresh infections even as manufacturers faced challenges to procure raw materials in a timely manner. In addition, Japans manufacturing sector also registered a weaker growth across new export orders, employment and backlogs of work while output and input costs surged higher.
Meanwhile, Japans services sector contracted at a more severe pace during July, extending its dismal performance into the 18th straight month. The The au Jibun Bank Flash Japan Services PMI fell to a seasonally adjusted reading of 46.4 in July from the final reading of 48 in June.
The stronger contraction in this sector came on the back of a stronger decline across output, new orders and new export orders. In addition, the services sector also saw employment contract after posting growth in the previous month even as firms experienced higher inflation in input and output costs.
Impact on the JPYDespite the disappointing data, the Japanese yen is making gains against the US dollar early on Monday. The market sentiment is driving the safe haven appeal of the currency higher, supporting its recent strengthening as markets worry about the economic impact of the latest wave of the pandemic being driven by the spread of the delta variant of COVID-19 around the world.
At the time of writing, USD/JPY is trading at 110.33 after experiencing a sharp drop from above the 110.50 levels a few hours ago.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
Easy Trading Online Broker Proud to be a trusted Forex trading platform. Fulfilling all the mentioned criteria, we provide: A trading platform that is easy to use and understand. Advanced market analysis tools To help you keep track of market changes and make effective trading decisions. Competitive trading fees It will help you save on your expenses. Professional customer support team Always available to advise when in doubt 24/7.
Easy Trading Online, a leading global CFDs broker regulated by ASIC, won the Best Online Trading Services Award at the BrokersView 2024 Award for Brokers with Outstanding Assessment·Middle East in Dubai. The award recognizes their excellence in trading services, leveraging technology and ensuring liquidity.
The Traders Fair Thailand 2024 was successfully held at Bangkok Shangri-La Hotel on February 3rd. As an exhibitor and sponsor, Easy Trading online attended the Expo with professional service team and extraodinary online trading experience on FX & CFDs.
Easy Trading Online, global CFDs & FX broker, is excited to announce its platinum sponsorship of the "Demo Trading World Cup Season 2." This sponsorship not only reinforces Easy Trading Online's commitment to the forex trading community but also highlights its status as nominated as one of the “the hottest brokers” and “the most popular brokers”in the popularity polls.