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Japan Factory Sector Strengthens in April: PMI Report

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Japan's manufacturing sector expanded in April despite global oil woes, although some production was to build cautionary buffers and stockpiles, reported S&P Global on Friday.

The nation's manufacturing purchasing managers index (PMI) rose to 55.1 in April, up from 51.6 in March, and striking further above the 50-mark that separates growth from contraction, reported S&P Global, citing its monthly survey.

Some manufacturing sector managers noted "that concerns over future supply chain delays and price increases due to the war in the Middle East had led customers to place new orders," while factories also built up precautionary stockpiles in April, explained S&P Global.

However, Japan's industry in April also participated in the global AI-boom. "There were also reports that higher sales had been supported by greater demand for AI-related technology," said S&P Global.

Japan's manufacturers reported both rising costs and boosting prices for customers in April.

Factory managers "frequently mentioned higher prices for raw materials, oil and transport in the latest survey period," said S&P Global. "To help ease pressure on margins, companies raised their selling prices."

Japan's manufacturers also added to payrolls in April, at the fastest pace since early 2022.

Despite strong demand, Japan's manufacturers were wary in April, citing geopolitics.

Due to "uncertainty around the war in the Middle East and its impact on global economic conditions" survey respondent optimism regarding the one-year outlook slipped to its second-lowest level since June 2020, said S&P Global.

The Japan manufacturing PMI was compiled by S&P Global from surveys received from 400 manufacturers from April 9 through April 23.

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