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TOKYO, June 23 (Reuters) – Japan’s manufacturing sector sustained robust growth in June, with new orders surging to their fastest pace in more than four \u200cyears, though cost pressures continued to intensify due to the repercussions from \u200cthe Iran war, a survey showed on Tuesday.<\/p>\n
The S&P Global flash Japan Manufacturing Purchasing Managers’ Index (PMI) edged \u200bup to 54.9 in June from 54.5 in May, rebounding closer to April’s 55.1 that marked the strongest expansion since January 2022. PMI readings above 50.0 indicate growth in activity, while those below that level point to a contraction.<\/p>\n
Factory output rose at a slightly \u200cquicker rate, while new orders \u2060accelerated to their fastest pace in more than four years. This was partly driven by stock-building among customers concerned about supply disruptions \u2060and future price increases stemming from the Iran war, according to the survey.<\/p>\n
The growth of new export orders slightly slowed from May, when it was at the fastest pace in \u200bfive \u200byears.<\/p>\n
Manufacturers’ input and output inflation eased but still \u200bhovered near their highest since \u200clate 2022, as the conflict in the Middle East pushed up expenses for energy, fuel and raw materials.<\/p>\n
Employment in manufacturing increased at the fastest pace in more than eight years in June.<\/p>\n
The services sector rebounded after a pause in May, with the flash Japan services PMI rising to 51.8 from 50.0, supported by improved domestic conditions while \u200cforeign demand shrank faster. The flash Japan composite \u200bPMI, which combines manufacturing and services, rose to \u200b52.5 in June from 51.1 in \u200bMay.<\/p>\n
Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, \u200csaid: “Overall business activity growth across Japan picked \u200bup for the first \u200btime since the outbreak of war in the Middle East … while this suggests a strong Q2 performance overall, it is important to note that the \u200bcurrent period of growth is \u200cpartly being driven by stock-piling efforts amid the war in the Middle \u200bEast, and these efforts are likely to fade in the months ahead.”<\/p>\n
(Reporting \u200bby Kantaro Komiya; Editing by Jacqueline Wong)<\/p>\n<\/p><\/div>\n