Japanese Manufacturing Activity Accelerates in December

Manufacturing activity in Japan accelerated in December, according to a report from Markit Economics on Wednesday.

The headline manufacturing index rose to a reading of 53.8 for the month, outpacing the previous score of 52.3. A reading above the 50-point threshold suggests economic growth in the sector.

While not a key economic indicator for Japan the news nevertheless adds to the view that the country is indeed recovering.

Indeed, manufacturing in particular had come under some pressure over the last several months as a strong yen weighed on exports, the primary driver of economic growth for Japan. Fortunately a pullback in the currency over the last several weeks appears to have given the manufacturing sector a much needed boost.

The foreign exchange markets failed to act on the release with the yen continuing to weaken after Tuesday’s gains in the U.S. dollar.

The trading environment nevertheless remains quiet with a large number of market participants on vacation during the holiday season. At 2:35 a.m. GMT USD/JPY was up 50 pips at 92.13. Resistance lies at 92.32 after which the pair will make a fresh three-month high.