TOKYO, Dec 16 Reuters Japans factory activity came within striking distance of stabilisation in December, a privatesector survey showed on Wednesday, even as a resurgence in coronavirus cases is taking a toll on economies globally, particularly in Europe.
The slower decline in manufacturing will likely boost policymakers confidence that Japans exportoriented economy is able to pull through the crisis even as the services sector takes a heavy hit from a worsening flareup in COVID19 infections.
The au Jibun Bank Flash Japan Manufacturing Purchasing Managers Index PMI rose to a seasonally adjusted 49.7 from a final 49.0 in November, shrinking at the slowest pace in 19 months.
The headline index came within reach of the 50.0 threshold that separates contraction from expansion, largely thanks to reduced contractions in output and new orders as well as a modest improvement of employment conditions.
Privatesector businesses were optimistic that conditions would improve in the year ahead despite shortterm challenges posed by a COVID19 resurgence, said Usamah Bhatti, economist at IHS Markit, which compiles the survey.
Positive sentiment stemmed from the expectation that there would be an end to the pandemic which would fuel both domestic and international demand, he said.
Japans government last week announced a 708 billion economic stimulus package to help aide an economic recovery through boosting investment in new growth areas such as green and digital innovation.