The flash Nikkei Manufacturing PMI, compiled by Markit, edged lower from 51.4 in October to 51.1 in November, but that was still the second-best reading seen since January.
Output and new order growth slowed in November, but in both cases the expansions were the second-best recorded over the past ten months. Similarly, the employment index pulled back from the 30-month high reached in October but still signalled a welcome modest net increase in factory headcounts.
Key to the expansion has been an improvement in export performance. The survey’s index of new export orders signalled an increase in overseas sales volumes for a third successive month in November, halting a seven-month spell of continual decline.
The upturn in overseas sales reflected a combination of factors, including the recent weakening of the yen against the US dollar, reviving demand in many export markets, as well as supply chains returning to normal after earthquakes earlier in the year.
Domestic demand remained disappointingly weak, however, meaning the overall order books rise was in fact only very modest.