The Japanese manufacturing sector continued to experience improving operating conditions during August, with output, new orders and employment all registering expansion. Strengthened demand from both domestic and international sources (especially China) was widely reported by panellists.

Price data showed that inflationary pressures continued to dissipate, with input costs rising to the slowest degree of 2017 so far. Output charges were increased only slightly as a result.

The headline Japan Manufacturing Purchasing Managers' Index (PMI) - a composite singlefigure indicator of manufacturing performance - was little changed during August at a level of 52.2 (July: 52.1). The latest reading was indicative of solid growth, and the PMI has now recorded above the 50.0 no-change mark for 12 successive months.