2018.03.0101:55:00UTC+00Japan Final Manufacturing Growth Eases but Hiring Remains Strong - PMI

Japanese manufacturing activity grew at a marginally softer but still stronger pace in February, revised data showed, as the stronger yen added pressure on new export orders.

However, hiring increased at its quickest pace in 11 years as companies remain optimistic about future demand.

The final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) was a seasonally adjusted 54.1, against a preliminary 54.0 and a final 54.8 in January.

The index remained above the 50 threshold that separates growth from contraction for the 18th consecutive month, but fell for the first time in four months.

Export order growth deteriorated to slowest pace in three months but remained strong overall after notching a 92-month peak in January.

The yen has strengthened by five percent against the dollar so far this year, raising worries among policymakers and companies that it could reduce the country's export competitiveness, while increasing deflationary pressure by reducing import prices.

Input costs continued to grow sharply, particularly for oil-related products, but firms were able to pass on some of the higher cost burden to their customers.

In one positive sign, the PMI showed job creation accelerated to an 11-year high because companies expect output to grow more in the future.

Japan's economy has expanded for eight consecutive quarters, the longest continuous expansion since a 12-quarter stretch between April-June 1986 and January-March 1989 around the height of Japan's notorious economic bubble.