Nikkei Flash Japan Manufacturing PMI: Japan Factory Activity Shrinks

The Nikkei Flash Japan Manufacturing PMI increased from 48.1 in June to 49.0 in July of 2016, with market expectations of 48.3. While output and new orders declined at a slower pace, new export orders fell at the sharpest rate in over 3-1/2-years. On a positive note, employment rose marginally. At the same time, input prices decreased at the fastest rate since November 2009, assisted by a stronger yen/dollar. The headline index has been in a contraction since March.

"International demand fell at the sharpest rate in over three-and-a-half years, with many panellists blaming the appreciation of the yen leading to a reduction in global competitiveness," a statement released with the survey said.

"Latest survey data pointed to a further deterioration in manufacturing conditions in Japan. Both production and new orders declined at marked rates, led by a sharp drop in international demand," Markit said.

Market Snapshot



Equity Markets: Top performers: India, Japan, Australia. Worst performers: South Africa. The S&P 500 lost 0.36 percent, to 2,165.17 and the Nasdaq Composite fell 0.31 percent, to 5,073.90. The Nikkei stock index was down 0.9 percent at 16,660.01. MSCI index was down 0.4 percent. China's CSI 300 index and the Shanghai Composite both fell 0.4 percent. New Zealand stocks continued their record-setting trend, climbing 0.3 percent to hit a fresh all-time high on Thursday. Australia ended at the highest point since Aug. 6, 2015, and Hong Kong set a 2016 high.

Currency Markets : Top performers: NZD/CAD, NZD/JPY, NZD/AUD. Worst performers: CAD/USD, CHF/NZD, EUR/NZD. The yen bounced back to 105.88 yen per dollar from 107.49. The euro traded at $1.1028, slightly above this week's low of $1.0980. The British pound was little changed at $1.3230. The kiwi stood at $0.6982, having fallen to $0.6952 on Thursday. The dollar index stood at 96.917, off Wednesday's 4-month peak of 97.323.

Commodities Markets: Top performers: Crude oil (Brent), Heating oil, Gasoline. Worst performers: Soybean oil, Soybean Meal, Soybean.U.S. West Texas Intermediate crude was up 6 cents at $44.81 a barrel. The contract fell 2.2 percent, the previous day. Brent crude was up 14 cents at $46.34 a barrel. The global benchmark closed 2.1 percent, lower on Thursday. Spot gold edged lower 0.5 percent at $1,324.30 an ounce. Silver, which hit a near two-week low on Thursday, was down 0.2 percent to $19.72 an ounce. Platinum was down 0.2 percent to $1,095.05. Palladium lost 0.4 percent to $679.60.

Treasuries: Top performers: US T-bond, Euro Bund. Worst performers: Euro Schatz, Euro Bobi. Benchmark U.S. 10-year Treasury notes were up 5/32 in price for a yield of 1.561 percent, down from 1.580 percent late on Wednesday. U.S. 30-year bond prices were flat, yielding 2.296 percent. U.S. two-year notes were up 1/32 in price, yielding 0.685 percent, down from 0.714 percent on Wednesday.