The Nikkei 225 rose for a ninth consecutive
session Monday to close 0.7% higher on its final trading day of the year,
bringing its full-year rise to 57%, the highest since 1972. Meanwhile,
manufacturing sector output in December rose at the sharpest rate since 2006.
The Nikkei Stock Average ended up 112.37 points,
from Friday at 16,291.31, its highest close since Nov. 2, 2007. It was the
index's ninth consecutive day of gains, its longest rally since July 2009.
Japan's seasonally adjusted industrial
production rose 0.1% in November compared to the previous month, the
ministry of economy, trade and industry said in Friday's preliminary reading - -
rising for the third straight month while Japan's core consumer prices climbed
1.2% in November from a year earlier, accelerating to a new five-year high,
government data has shown, marking steady progress towards beating 15 years of
Reuters reported that the rise in the core
consumer price index, which includes oil products but excludes volatile prices
of fresh food, compared with a 1.1% increase expected by economists in a poll.
That marked the fastest growth since 1.9% seen in October 2008, data from
the ministry of internal affairs and communications showed.
The core-core inflation index, which excludes food and energy prices and is
similar to the core index used in the US, rose 0.6% in the year to November, a
second straight month of gains and the biggest increase since a 0.7% increase in
Data on cash earnings show a rise 0.5%
in November from a year earlier, breaking four months of decline,
government data showed last week. Wages excluding bonuses and overtime were
unchanged, ending a 17th-month slide.
Wages need to rise in real terms to win the war
December saw business conditions at Japanese
manufacturers improve at the sharpest pace since
July 2006. The rates of output and new business
growth eased slightly from November, but
nevertheless both remained sharp. Reflecting the
recent strength of production and new order growth,
employment expanded at the sharpest rate since
June 2007. Meanwhile, output prices rose at the
sharpest pace since November 2008. Input cost
inflation followed a similar pattern in December,
accelerating to a 33-month high.
The headline seasonally adjusted Markit/JMMA
Purchasing Managers’ Index (PMI) - - a
composite indicator designed to provide a single figure
snapshot of the performance of the
manufacturing economy - - posted at 55.2 in
December, up from 55.1 in November. This
signalled that operating conditions in the Japanese
manufacturing sector improved at the sharpest
pace since July 2006. Moreover, this continued the
longest sequence of growth in over three years, as
the PMI posted above the 50.0 no-change mark for
the tenth consecutive month.
Both production and new order growth eased in
December, though their respective rates of
expansion remained well above trend. Output
increased for the tenth successive month, though
the rate of growth fell from November’s four-year
high. New orders also grew sharply and continued
a ten-month sequence of expansion. A strengthening of domestic demand and public
projects were cited by panellists as key drivers
behind the latest rise in new business.
New export orders rose for the fourth successive
month in December, though the rate of expansion
eased from November’s 42-month high. Panellists
attributed the latest growth to an increase in export
demand, particularly from Myanmar, Thailand and
December marked the fifth successive increase in
backlogs of work, as outstanding business
expanded at the sharpest pace since April 2006.
Reflective of this was the latest increase in
employment, which rose at the sharpest pace in
six-and-a-half years in December. Anecdotal
evidence indicated that the latest recruitment was in
part the result of sales initiatives and higher levels
of incoming orders.
Meanwhile, December saw output prices rise at the
sharpest pace since November 2008. A number of
panellists attributed this to passing higher costs of raw materials on to
customers. Input costs also
rose sharply in December, and the pace of price
inflation hit a 33-month high. Respondents
commonly cited foreign exchange movements as a
contributory factor, as well as increases in raw
materials and staffing costs.
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