Japan PMI Shows Solid Growth in Q4

The Nikkei Composite PMI™ Output Index maintained a steady rate at 52.2 during the month of December. This further reflects for an optimistic end of the year for the Japanese economy, as the latest estimate showed a reading of 52.6 in the fourth quarter which was higher compared with the third quarter.

According to the official statistics issued by the Cabinet Office of Japan, the GDP for Q3 was revised upwards from 0.3 percent versus the initial 0.6 percent. These comparisons indicate that survey data remained unchanged, as the economy continues to grow by 0.7 percent every quarter until 2017 ended. Moreover, it implies for an upside risk to various projections such as the current prediction of 0.3% growth from the IHS Markit.

The goods-producing industry increased its momentum to demonstrate its fastest expansion in almost four years in December. While the manufacturing activity also grew due to strong gains in export and the strongest growth of foreign sales was recorded in late 2013.

Contrarily, the service sector sustained a modest rate of increase but business conditions showed more improvement in 2017 than of the previous year.

On the other hand, exports continued to be a major driver for the economy, particularly in the manufacturing industry. Furthermore, there is an evident risk that will slow down the GDP growth if the momentum of exports will soften.