Japan Dec CPI -1.0% Y/Y; 9th Monthly Fall


(H1) Stabilises


(H1) New Multi-Month Lows


(H1) Recovering From the Lows


New Cycle Lows

--Official Mfg PMI Above 50 For 16th Consecutive Month
--Official Services PMI Rose to 54.8 from 54.3 in October.
     BEIJING (MNI) - PMI data released Thursday by the China Federation of
Logistics and Purchasing:
          Manufacturing PMI  Services PMI
November               51.8          54.8
October                51.6          54.3
     Note: Readings above 50 indicate expansion in the sector, while readings
below 50 signal contraction. The higher the PMI reading above 50, the faster the
expansion in the sector. The lower the reading below 50, the faster the
     --Manufacturing new orders index rose to 53.6 in November from 52.9 in
     --Manufacturing production index rose to 54.3 in November from 53.4 in
     --Input price index fell to 59.8 in November from 63.4 in October.
     --Business expectations index rose to 57.9 in November from 57.0 in
     --New export orders rose to 50.8 in November from 50.1 in October.
     TAKEAWAYS: The official China manufacturing purchasing managers index
(PMI), jointly released by the China Federation of Logistics and Purchasing
(CFLP) and the National Bureau of Statistics, rose to 51.8 in November from 51.6
in October. The November index was the second highest this year after the 52.4
reading in September and matched the 51.8 reading in March. 
     The pickup in the November manufacturing PMI was unexpected, with the
median forecast of an MNI survey predicting an unchanged reading of 51.6. 
     The November reading was the 16th consecutive month that manufacturing
sentiment has remained above the 50-point mark, which divides expansion from
contraction. It was also the 14th consecutive month that the index has been
above the 51-point mark. 
     The NBS attributed the overall PMI pickup to the robust production and new
orders. The production index rose 0.9 percentage point to 54.3 in November from
last month, while the overall new order index rose 0.7 percentage points to
     "The quality in the supply side continued to improve. The high-tech sector
saw obvious growth, with the PMI rising over one percentage point," the CFLP
said in a statement, "Equipment manufacturing and the consumer goods sector
maintained good momentum, with their PMI remaining at 53."
     The stable economy has boosted domestic demand, which contributed to the
rise in the new orders index, the CFLP said. The number of manufacturers
complaining that new orders were insufficient fell 1.5 percentage points to
35.7, the lowest level for several years.
     Despite the rise in overall sentiment, employment fell further into
contractionary territory, inching down to 48.8 from 49.0 in October.  
     Raw material inventories also contracted at a faster pace, with sentiment
dropping to 48.4 in November from 48.6 the month before. 
     Supplier delivery times continued to deteriorate, though sentiment
rebounded to 49.5 from 48.7. 
     Both manufacturing export and import sentiment indexes strengthened. The
new export orders index increased 0.7 percentage point to 50.8% as overseas
demand grew on the approach of the Christmas holiday.
     Both input and output price growth decelerated in November. Input prices
eased to 59.8 from 63.4 in October, while output prices growth fell to 53.8 from
55.2. It was the second consecutive decline for both, with the gap between input
and output prices falling to 6 percentage points from 8.2 in October. 
     The price deceleration "indicates the pressure from high production costs
has eased. The gap between input and output price further contracted further,
which helps to improve manufacturers' profits," the CFLP noted. 
     The sub-index of finished goods inventories and orders on hand were still
below 50.
     Manufacturers' confidence about the future rose, with the business
expectations sub-index increasing to 57.9 from 57.0. 
     By size, business activity sentiment among big manufacturers was 52.9, 0.2
percentage point lower than last month. The sentiment among medium-size
manufacturers rebounded out of contractionary territory to 50.5, 0.7 percentage
point higher than October. Small firm sentiment remained in contraction at 49.8,
but was 0.8 percentage point higher than the month before, according to the NBS
     "The good and upward momentum of the manufacturing sector is further
solidified in November," the NBS economist Zhao Qinghe said.
     The CFLP services PMI also rose in November to 54.8 from October's 54.3
reading. The CFLP attributed the growth to rising demand and prices. 
     Wu Wei, a CFLP economist, said the rapid growth of input prices in the
services sector could trigger a jump in consumer inflation, and so needs to be
watched closely.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
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