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Economy in Brief

Japan's PMIs Hang in There...
by Robert Brusca  July 3, 2019

Japan's PMI readings in June barely moved. The composite ticks higher. Manufacturing weakens and continues to contract. The services sector does two ticks better than May.

The ranking of the sector readings since January 2015 show manufacturing this weak or weaker only 13% of the time. Services are this high about 68% of the time. Still, the composite sits in the 25th percentile of its historic queue of data on this timeline, a weak result.

Japan's PMI readings have recently seen the services sector step up. During the same time, manufacturing has been in a downswing.

Asia as a whole is weak. The absolute strongest manufacturing PMI reading in June is Myanmar at 53, followed by Vietnam at 52.5, India at 52.1 and the Philippines at 51.3. The highest queue standings (relatively highest readings since 2015) are in Myanmar and Thailand.

But some of the big important economies are showing very weak queue standings: China at 9.4 percentile, Japan at a 13.2 percentile, and South Korea at a 3.8 percentile. Asia is struggling.

While markets are breathing a sigh of relief with the United States and China back talking about trade, a deal could still be a long way off. I don't dismiss the idea that China is shining Trump on trying to stretch it out so it can negotiate with Democrats who will be a softer touch – if they can defeat Trump.

It's a complicated world. Everything matters. Even domestic politics are not completely domestic anymore. Keep an open mind but shut your computer down at night…you never know.

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