SUMMARY Japan’s services PMI surged by 2.2 points to 52.4 in October after a notable drop in September. The manufacturing PMI rose modestly to 52.9 in October from 52.4 in September. The strength in services PMI may suggest momentum in Japan’s domestic economy remains solid. Consumption recovery and expansion of corporate capex are driving growth. However, headwinds are building on the external fronts. Elevated trade...
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The domestic economy is retaining its momentum, but external headwinds are building.The Japanese services purchasing managers index (PMI) rose sharply in October, surging by 2.2 points to 52.4, after a notable drop in September. The manufacturing PMI rose as well, but more moderately, reaching 52.9 in October from 52.4 in September. The rise in services PMI suggests domestic demand remains solid. On the one hand, household consumption is recovering. Retail sales have undergoing an expansion...
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The recent rise in wage growth is positive for consumption and puts pressure on inflation.Wage growth in Japan accelerated further in March. Nominal cash earnings rose by 2.1% y-o-y, the fastest growth since mid-2003. Base salaries increased by 1.3% y-o-y, the highest in nearly two decades, and the strong rise in bonuses (up 12.8% y-o-y) also contributed significantly to wage growth in March.Rising wage growth in Japan likely reflects the increasing labour market constraints in Japan. Since...
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