Japanese Purchasing Managers Index
The Markit Japanese Composite Purchasing Managers Index (Composite PMI) is based on original survey data. These data are collected from a panel of firms that represent, and are based in, the Japanese manufacturing and service sectors.
The major composite index is composed of two minor indices. It is a weighted average of the Manufacturing Output Index and the Services Business Activity Index. These are all based on original survey data collected from a representative panel of over 800 Japanese-based firms that serve Japan’s manufacturing and service sectors. The survey data is collected mid-month. Survey responses reflect change in the current month compared to the previous month.
Is The Japanese PMI Composite Important?
Yes! PMI Data is an important macroeconomic indicator. Investors need to keep their finger on the pulse of the economy to form expectations of how various types of investments will perform. By tracking economic data such as the PMI numbers, investors will get a better picture of what the economic backdrop is for the various markets.
- The stock market likes to see healthy economic growth because that translates to higher corporate profits.
- Governments like to keep markets inflated because a portion of those corporate profits (and inflated assets) are converted into tax revenue.
- The bond market prefers slow growth and is extremely sensitive to whether the economy is growing too quickly (inflation).