Japan's Oct PMI rises to 53.2 as easing pandemic restrictions, vaccination ramp-up spur recovery

Japan's manufacturing activity expanded in October, with the purchasing managers' index rising to 53.2 from 51.5 in September, as easing pandemic restrictions and a ramped-up vaccination program further encouraged economic activity.

The au Jibun Bank Japan Manufacturing PMI's uptick in October marked the ninth consecutive month of expansion.

A pandemic state of emergency was lifted Sept. 30 across Tokyo, Osaka and 17 other prefectures and curbs across eight prefectures lifted soon after, marking the first time since April that Japan was free of movement restrictions. In addition, the Japanese government said 70.1% of the population had received two doses of a COVID-19 vaccine by Oct. 26, up from 60.9% on Oct. 4.

This spurred strength in the manufacturing sector, prompting the Ministry of Economy, Trade and Industry to forecast that crude steel production would rise 9.7% year on year to 24.11 million mt over October-December, and firm 0.8% from July-September.

Manufacturing steel requirements were expected to rise 10.3% quarter on quarter to 6.43 million mt over October-December, and rise 0.5% year on year, led by the automotive sector, which was forecast to require 2.65 million mt of steel over October-December, up a sharp 16.7% form the previous quarter and down a slight 0.3% year on year.

Automotive demand however will be tempered by Toyota Motor Corp. announcing Oct. 15 that it expects to produce 100,000-150,000 fewer vehicles worldwide in November, citing a shortage of automotive parts.

Toyota's global production fell 38% year on year to 603,762 vehicles in September, and was down 4.5% from August, after the company had earlier projected a production loss of 100,000-150,000 vehicles for September and October.