Capital Economics: Japan’s PMI Supports BOJ Rate Hike Resumption in October

Japan's latest PMI data supports Capital Economics' view that the Bank of Japan may raise interest rates sooner rather than later. The country's composite PMI for June rose to a four-month high of 51.4. Both manufacturing and services PMIs saw slight increases in June. Abhijit Surya, an economist at Capital Economics, wrote that the manufacturing output index indicates a renewed acceleration in industrial production, while new export orders suggest moderate sales growth. The services PMI remains well above its historical average, consistent with robust consumer spending. Overall, it is expected that the Bank of Japan has grounds to raise rates in October, rather than waiting until early next year as many anticipate. (Jin10)