Japan’s factory activity slowed at the fastest pace in two and a half years in February, private surveys by au Jibun Bank showed on Wednesday. This underscored the challenges faced by businesses as a result of the global economic slowdown, raw material inflation, and policymakers’ calls for higher wages.
The final reading of the au Jibun Bank Japan Manufacturing Purchasing Managers’ Index dropped to 47.7 in February from January’s 48.9. Even though it was higher than the flash reading, this was the sharpest drop since September of 2020.
This was also the fourth consecutive month that Japan’s industry activity remained in contraction territory.
The final PMI result comes a day after official data indicated that Japanese firms cut output at the highest rate in eight months in January, pulled down by the auto and semiconductor sectors.
According to Japan’s Ministry of Economy, Trade, and Industry on Tuesday, factory output dropped 4.6% in January compared to the previous month.
The reading declined more than expected by 2.9%, following a 0.3% increase the previous month.