Asian manufacturing firms bouncing back after spring slump

Shinzo Abe's tax hike hit Japanese industry
Two of Asia’s largest manufacturing sectors indicated more robust growth in June, with businesses in both China and Japan reporting an improved expansion last month.

Data from Nomura and JMMA suggest that Japan’s manufacturing firms are bouncing back from their decline around April’s sales tax hike, with a purchasing managers’ index (PMI) score of 51.5. Any figure above 50 signals growth.

“Three months on from the consumption tax hike, and most indications are that Japan’s economy is absorbing the impact as well as might have been reasonably hoped,” said Emily Nicol of Daiwa Capital Markets.

Two PMI surveys of China’s dominant industrial base were also positive. HSBC’s reading of the sector rose to 50.7, very marginally above 50, but positive for the first time in 2014.

The Chinese government’s own PMI score for the manufacturing sector was slightly higher at 51, which was also the best recorded so far this year.

Markit’s index for US factories yesterday came in at 57.3, suggesting a solid performance despite a marginal decline from the previous month’s score.

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