Japan, Australia, and India Led Asia-Pacific Manufacturing PMIs
Mixed Manufacturing PMIs across Asia, Europe, and the Americas
China remains a concern
The manufacturing PMI (purchasing managers’ index) released across Asia for January. It showed a reading above 50 for Japan, Australia, India, and Taiwan. On the other hand, China, South Korea, Indonesia, and Malaysia recorded manufacturing activity below the threshold level of 50. A PMI reading below 50 indicates a contraction in the manufacturing sector. This has been a major concern for global investors. In contrast, a reading above 50 points towards expansion in the manufacturing sector. Recently, Japan introduced negative interest rates to spur the economy. The BoJ (Bank of Japan) looks to ease its monetary policy more and provide a thrust to its manufacturing and export sector.
Manufacturing PMI increases for India, drops for Australia and Japan
The Chinese manufacturing PMI released below the crucial 50 level for the sixth consecutive month. It was 49.4 for January. Investors are still concerned about the slowdown in the global manufacturing hub. India recorded higher-than-expected growth in manufacturing activity at 51.1 for January. Australia and Japan are leading players in terms of the manufacturing PMI. Their releases fell for January at 51.5 and 52.3, respectively, compared to the previous month. Taiwan also saw a reduction from the previous month. It recorded a manufacturing PMI of 50.6 in January.
Impact on the market
The iShares China Large-Cap ETF (FXI) and the iShares MSCI Japan ETF (EWJ) were trading on a negative at the end of February 1, 2016. They were trading at 2.2% and 0.61%, respectively.
On the other hand, Taiwanese ADR (American depositary receipt) Taiwan Semiconductor Manufacturing (TSM) ended the day higher by 0.49%. Japanese automobile manufacturer Toyota Motor (TM) rose by 0.31%. Indian ADR Tata Motors (TTM) ended the day higher by 2.1 %.
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