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Japan Snaps 19Month Decline in Factory Activity in Dec PMI

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TOKYO, Jan 4 Reuters Japans factory activity ended a record 19month run of declines in December as output stabilised for the first time in two years, suggesting manufacturers are shaking off the negative impact from the coronavirus pandemic.

The privatesector data contrasts somewhat with last weeks government figures that showed industrial output growth stalled in November because of declines in car production on weakening U.S. and Australiabound shipments.

The final au Jibun Bank Japan Manufacturing Purchasing Managers Index PMI rose to a seasonally adjusted 50.0 in December from the previous months 49.0 and a preliminary 49.7 reading.

The headline index hit the 50.0 threshold that separates contraction from expansion for the first time since April 2019, largely because output and employment conditions stopped decreasing, ending the longest run of declines on record.

Japanese manufacturers signalled a broad stabilisation in operating conditions at the end of a tumultuous year, said Usamah Bhatti, economist at IHS Markit, which compiles the survey.

The PMI survey also showed overall new orders declined at the softest pace since December 2018. Growth expectations for the year ahead rose on hopes that the COVID19induced downturn will fade and new product launches will stimulate demand.

Businesses reported a sustained increase in optimism, with a third of respondents predicting a rise in output over the coming 12 months, Bhatti said.

The survey results were not…

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