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Japanese Manufacturing Sector Takes a Slight Dip, But Not a Nosedive

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The latest reports show that Japan looks good as the main Asian manufacturer of the latest Boeing model. The latest move is a continuation of the agreement with Boeing that has seen Japan building its planes for almost two decades.Japan Daily Press notes, “Global airplane manufacturing giant Boeing has continued to line up Japanese companies as one of the main sources to build its latest plane model, the 777X. Boeing has included Mitsubishi Heavy Industries and Kawasaki Heavy Industries among the companies who will build around 21 percent of their newest plane, still making Japan its key Asian partner in making commercial jetliners.”

However, not all is well with manufacturing in the aviation industry. Japan Airlines (JAL) is experiencing profit loss due to the weakening yen continuing to drive up costs for manufacturers.

According to the BBC News, “The carrier earned 166.25bn yen ($1.6bn; £950m) for the year to March, a 3.2% drop from the previous year. A fall in the value of the Japanese yen, while a boost for exporters, is bad for Japan’s aviation industry. That is because it pushes up the cost of fuel, which is usually the biggest expense for an airline.”

This news accompanies the recent market changes, which could affect the manufacturing sector as a whole.

A report by Business Insider states, “Japan’s April Markit manufacturing survey yielded some mixed results. The headline PMI fell to 49.4 in April from 53.9 in March. This was the first sub-50 reading in 14 months, and any reading below 50 signals contraction.”

The weakening yen, plus the data out of the manufacturing sector may have only compounded the latest move that led officials to rethink their previous plans for the stimulus program.

According to the Malay Mail Online, “The Bank of Japan today [April 30] held fire on expanding its stimulus program despite tepid industrial production data and a recent sales tax rise that have fanned fears over the strength of the country’s recovery.”

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