In March, Japan's manufacturing sector saw a slower contraction while the service sector continued to expand, contributing to overall growth in the private sector, according to a recent business survey released on Thursday.
This data follows a significant policy shift from the Bank of Japan earlier in the week, marking the end of radical stimulus measures and the first interest rate hike in 17 years.
The flash au Jibun Bank Japan manufacturing purchasing managers' index (PMI) increased to 48.2 in March, up from 47.2 in February. Although remaining below the 50 index level indicating growth, the rate of decline was the least severe in four months.
According to Usamah Bhatti at S&P Global Market Intelligence, who compiled the survey, manufacturers experienced a continued but milder decrease in production. The decline in output and new orders slowed down in March, suggesting some improvement in demand conditions and a decrease in backlog of work.
Meanwhile, the service sector saw a robust expansion, with activity growing at the fastest rate in 10 months.
The flash services PMI rose to 54.9 in March, the highest since May last year, with incoming business also accelerating to the highest level in nine months.
However, there were signs of increasing price pressures on the private sector, as input cost inflation reached its highest level since last September. While price pressures also persisted in manufacturing, the pace of increase was the slowest in eight months.
The composite PMI, which combines both manufacturing and service sector activity, climbed to 52.3 in March, marking the highest level since August last year.
Paraphrasing text from "Investing" all rights reserved by the original author.
