Japan September data return to positive territory

The Markit/Nikkei flash manufacturing purchasing managers’ index (PMI) came in at 51.7 in October, up from a final September reading of 50.4. Analysts in a median estimate called for an increase to 50.6. A PMI reading above 50 indicates expansion in economic activity. 

The October reading was the highest since July 2015, and followed the first expansion in headline PMI in seven months. Output, new export orders and employment increased at a faster rate this month, while new orders returned to positive territory.

“Data suggested that a strong expansion in foreign demand led to the rise in total new orders, as new exports rose at the fastest rate in nine months. Not surprisingly, goods producers were more confident to take on additional workers, with the rate of job hiring picking up to a two-and-a-half year high. Firms also benefitted from lower cost burdens, as input prices declined,” Amy Brownbill, economist at IHS Markit, said in a statement.

Earlier in the day, customs figures released Monday showed exports in September totaled 5.97 trillion yen ($57.4 billion). Exports y/y was at -6.9%, analysts exptected -10.8% while imports fell 16.3 percent from a year earlier to 5.47 trillion yen ($52.6 billion) and beat -17.0% expected.
"The strong rise in export volumes underlines that Japan's manufacturing is showing resilience as external demand remains weak," Marcel Thieliant of Capital Economics said in a commentary.