Japanese manufacturing activity expanded at its slowest pace in more than a year in August, despite factory output edging up in July. This hints at the pinch companies are starting to feel from an export slowdown and a strong yen.
Official data shows Japan's industrial output rose one third of a percent in July after a 1.1 percent decline in the prior month. For August, manufacturers expect the figure to grow 1.6 percent.
But on the contrary, the Manufacturing Purchasing Index, or PMI, fell to a seasonally adjusted 50.1 in August, down from 52.8 in July. That's its lowest level in fourteen months. The index for new orders decreased to 48 from 54, making it the major reason behind the PMI's overall decline. The disappointing figures are attributed to Japan's slow economic recovery and a stubbornly strong yen.