FX.co ★ Japanese manufacturing output growth accelerates

Japan flash manufacturing PMI expanded to 53.5 in February from 52.3 in January, marking the highest level since March 2014.

The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of final PMI data.

Thus, the PMI score of 53.5 signals not just improvement of activity in February, but also the acceleration of output compared with the previous month.

In February, growth of activity was recorded in separate sectors, but the majority showed growth at a faster pace than in January.

An increase in both new domestic and foreign orders signals that activity in the manufacturing sector will continue to rise.

Commenting on the Japanese Manufacturing PMI survey data, economist at IHS Markit Samuel Agass said: “Encouragingly, with backlogs of work accumulating for the first time in 14 months, the added pressures on capacity should ensure growth will be maintained at a solid pace during at least the first half of this year.”