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Japan’s Manufacturing and Services Sectors Contract at Faster Pace

Factory activity across Japan contracted at a faster pace during November due to a decline in output and orders, raising worries about economic recovery in the wake of the coronavirus crisis. The au Jibun Bank Flash Japan Manufacturing PMI slipped to a seasonally adjusted reading of 48.3 for November from 48.7 in October, remaining under the 50-threshold indicating contraction for the 19th consecutive month.

November’s reading was the first one in six months where the pace of decline picked up instead of easing. The weakness in the sector was driven by a reduction in manufacturers’ output in addition to a steeper decline in total new and export orders received by Japanese manufacturing firms.

Meanwhile, the services sector in Japan also saw a faster pace of contraction, with the au Jibun Bank Flash Services PMI falling to 46.7 in November from October’s final reading of 47.7. The flash Composite PMI has also registered a decline, from 48 in October to 47 in November.

Principal economist at IHS Markit, Bernard Aw, observes, “Looking ahead, the path to recovery remains fraught with challenges. A renewed rise in the number of COVID-19 cases worldwide could dampen global economic activity and trade, thereby putting Japanese exporters in a tough situation.”

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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