Japan’s Services PMI Strengthened: How It Could Impact the Economy

According to the report provided by Markit Economics, Japan’s manufacturing PMI stood at 52.9 in March 2017, compared to 51.3 in February 2017, meeting market expectations.

March represented the sixth consecutive month of expansion. A level above 50 indicates expansion in activity while a level below 50 indicates contraction in activity. March’s manufacturing PMI was Japan’s highest figure since August 2015.

The stronger improvement in services PMI is indicating that the production output, new orders growth and export orders rose at a stronger rate in March 2017. This was the sixth consecutive month of expansion in service activity. Before that, it was in contraction zone.

Japan’s (EWJ) (DXJ) manufacturing has is also shown expansion in the last five months. However, its March reading showed weaker improvement. The overall domestic demand and overseas (VT) (ACWI) (VTI) demand in the services sector improved in Japan’s economy. This is a crucial factor for the economy, which has been suffering from slow economic growth.

In the next part of this series, we’ll see how India’s services PMI performed in March 2017.