The smoothed CEIC leading indicator remained on a steady downward trend in May, suggesting lower growth rate at least for a quarter ahead. The indicator peaked in November 2017 and has been declining since, reflecting the 2018 moderation of the Japanese economy.
Manufacturing PMI points to a continuation of the weakness in the sector, as in May it fell again below the threshold of 50, to 49.8. The index has been fluctuating around the 50 value threshold since the beginning of the year.
The PMI for services remained above the threshold, at 51.7. Business confidence also deteriorated, with the current situation diffusion index in the Tankan survey decreasing to 12% and the quarter ahead outlook to 7% (the index measures the difference in the number of optimists and pessimists for the business conditions among enterprises).
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