STORY: A manufacturing slowdown is sapping hopes for Japan’s economy.
Figures out Monday showed factory activity falling at its fastest pace in a year.
The closely watched Purchasing Managers’ Index for manufacturing from au Jibun Bank fell to 48.3 from 49 previously.
That’s well below the key 50-point mark that would indicate rising activity.
The data pointed to declines in production and new orders.
Firms cited worries including rising costs, labor shortages and uncertainty over mounting global trade tensions.
Inflationary pressures remained high, with both input costs and selling prices still on an upward trend.
However, companies did increase employment for a fourth straight month.
The service sector – which had been a bright spot – also lost momentum, with business activity contracting for the first time in five months.
The headline figure for the sector sank to 49.5 in March, way down on the previous month’s 53.7.
Numbers out last week showed shoppers are battling soaring prices for everyday goods, with the cost of rice up more than 80% year-on-year.
Analysts say the rising inflationary pressures increase the chances of more rate hikes by the Bank of Japan over the coming months.
AloJapan.com