Japan’s industrial activity dropped in June after expanding for the first time in seven months in May, a private survey showed Monday, weighed down by weak seasonal goods orders amid a global slowdown.
The final reading of Jibun Bank Japan manufacturing purchasing managers’ index was 49.8 in June, falling again below the 50.0 barrier that separates expansion from contraction. This follows May’s reading of 50.6.
Subindexes output and new orders have returned to contraction after a brief uptick fueled by higher business confidence.
Friday’s government statistics showed Japanese manufacturing output decreasing more than predicted in May due to automakers’ component shortage and production curtailment.
Japan has been able to mitigate the impact of deteriorating global economic conditions due to its booming service sector and ultra-loose monetary policy, but the slowing economies of the United States, China, and Europe are harming its export-dependent manufacturing sector.