In December, Japan's manufacturing sector continued to contract, although at a slower rate, according to the latest survey from Jibun Bank. The manufacturing Purchasing Managers' Index (PMI) rose to 49.6, up from 49.0 in November. Despite this increase, the index still falls below the critical threshold of 50, distinguishing between expansion and contraction.
Recent data indicated a milder decrease in output as the year ended, with the decline rate being minimal compared to the previous month. Many firms attributed the ongoing contraction to subdued demand, though some noted the launch of new products.
Manufacturers showed a lesser inclination towards utilizing existing inventories, as the depletion rate of finished goods holdings was minimal. Reports suggested that new order volumes were approaching stabilization in December, with the rate of reduction easing to the slowest pace in six months.
However, new export demand remained weak, attributed to tepid demand from major markets, particularly mainland China and the United States.
