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Analysts at Nomura note that the Japanese manufacturing PMI for September came in at 52.9, up 0.4pt from the August reading, indicating acceleration in manufacturing activity.

Key Quotes

“Among the five component indices, three made a positive contribution to the headline PMI: the new orders index rose 0.9pt to 53.3, the stock of items purchased index rose 1.8pt to 50.3, and the supplier delivery times index fell 1.0pt to 43.7 (a fall in this index pushes up the headline index). Meanwhile, the output index fell 0.2pt to 52.8 and the employment index fell 0.2pt to 51.3.”

“We would note, however, that the data for the September PMI were collected between 12 and 19 September, which leads us to believe that the PMI may reflect the impact on manufacturing activity from the damage to infrastructure (including Kansai International Airport) caused by the large typhoon that hit the Kansai region on 4 September and the earthquake that hit the eastern part of the Iburi region of Hokkaido on 6 September.”

“In particular, we think the drop in the supplier delivery times index and the rise in the stock of items purchased index in September may reflect the disaster damage to logistics infrastructure and a temporary lull in consumption, and we think this may have pushed up the PMI calculations.”