Japan December final manufacturing PMI highest since Feb 2014

TOKYO (Reuters): Japanese manufacturing activity expanded at the fastest pace in almost four years in December as new orders accelerated, a revised survey showed on Thursday, in a sign that steady economic growth will continue into the new year.

The Markit/Nikkei Japan Manufacturing Final Purchasing Managers Index (PMI) was a seasonally adjusted 54.0 in December, slightly below the preliminary reading of 54.2 but still above a final reading of 53.6 in November.

Even after the slight downward revision, the index was at the highest since February 2014. The index also remained above the 50 threshold that separates contraction from expansion for the 16th straight month.

“The Japanese manufacturing sector concluded Q4 with the highest PMI reading since February 2014,” said Joe Hayes, economist at IHS Markit, which compiles the survey.

“Output growth accelerated for a fifth month in succession, while new business opportunities, both domestic and foreign, rose sharply.”

The final index for new orders was 56.2, below the flash reading of 56.6 but above a final 54.7 in the previous month. The final output price index was 51.0, which is less than the flash reading of 51.4 and below a final 51.3 in November.

One of the government’s first tasks in the new year is to secure parliamentary approval of the national budget for fiscal 2018 starting in April.

Last month, Prime Minister Shinzo Abe’s cabinet approved a record budget for fiscal 2018 that the government hopes will keep the economy on track for a sustained recovery.