On Wednesday, the Japanese Statistic Institution published the PMI data manufacture which was increased from 51.4 percent to become 52.0 in March. That was in line with the economic expert forecast. It means that everything is not that surprising.
That manufacture activity recovery was not separated from the economic recovery factor globally. It is when a lot of countries started the COVID-19 vaccination program. The survey of PMI done by Jibun Bank showed something to the people or market participants.
It showed that the Japanese manufacture activity was helped by the output and new order increase. The output growth expectation in the future is also really positive. Everything is started by the deleted emergency steps and wider lockdown as well.
Vaccination Brings the Brighter Future
The massive vaccination program will trigger the recovery. It is especially for the demand recovery in the external and domestic market. That was stated by an expert from the IHS Market. However, the pressure on companies is increasing so far.
That is caused by the sharply increasing input price in the last few months. The producers reported that the input price has been increasing its highest level since November 2018. It creates the differences between the input and output price in the market.
Those prices reached their highest range since the December 2014. That condition makes the producers not so sure to accept the workers although the demand and output is increasing. That is why: the number of fire is so high for these 3 months.
In a different release it is reported that the Japanese service sector is still in a contraction territorial. The PMI data released by the Jinbun Bank only noted the increase from 45.8 percent to 46.5 % in March. It still under the 50.0 level which becomes the limit.
BoJ Highlighted the Economy Recovery
The situation above reflected that the Japanese service sector is still mastered by the pessimistic sentiment from the businessmen. Sometimes before the service and manufacture PMI data was released, the market participants also highlight one more thing.
That is the domestic and global economy recovery. BoJ stated that the Japanese economy has been increasing positively in some months lately. It is quite good, although that country is still in a severe condition due to the pandemic that hits some sectors in the country.
Those are the consumption and export sectors. BoJ also said that the foreign situation has been increasing significantly. That becomes the impact which follows the vaccination process and the shadowing coronavirus in Europe and USA.
The increasing positive cases there has the impact on the future economy outlook recovery. That is quite making sense since the lockdown decision may be taken again. Lockdown is a good thing to handle the pandemic, but not for the global economic.
The Third Wave of the Pandemic
The third COVID-19 and the new lockdown in the Europe is now becoming the center of attention for the market participants. Germany has been cancelling the lockdown plan during the Easter holiday period, but they still fail to get the market trust in that area.
The changing policies can increase the unsatisfied feeling. It is especially in the pandemic handling done by the government. The weak point in Europe is still around the vaccine distribution amidst the increase of new corona cases and the tight lockdown.
It means that the acceleration is slowing in the second quarter. The possibility is that the thing must be cancelled for one quarter. The risk-off sentiment is increasing as well. It is pushed by the expensive tax in the USA and the diplomatic tension of both countries.
However, the USD rally is losing its period. That is caused by the rebound condition, especially for the commodity currency. The AUD / USD increased by 0.5 percent. Meanwhile, kiwi and loonie as also up to 0.1 % in the market.
