Manufacturing activity in Japan remained in contraction for the ninth consecutive month during January, and is likely to add more pressure on Japan’s already struggling economy. The Jibun Bank Final Japan PMI touched a seasonally adjusted 48.8 in January, slightly higher than December’s final reaching of 48.4.

However, the reading not only remained under the 50 threshold indicating contraction but also came in lower than the prelim reading of 49.3. This is the longest continuing contraction seen in Japan’s manufacturing sector since early 2013.

The weakness in the manufacturing PMI was driven by a decline in overall factory output as well as in new orders – both contracted for the 13th consecutive month but at a slower pace than in the previous month. On the positive front, business sentiment among Japanese manufacturers rose to the highest level in 17 months over expectations of demand picking up.

The news has failed to have much of an impact of the Japanese yen which continues to trade bullish as its safe haven appeal remains supported over coronavirus worries. At the time of writing, USD/JPY is trading at around 108.53.