Chinese manufacturing activity picks up, Japanese business sentiment falls

Stocks in Japan fell by the most in more than a month in the wake of weaker-than-expected sentiment among big businesses early on Friday. The yen rallied and strengthened by as much as a quarter of a percentage point to 112.29 yen per dollar.

The Bank of Japan’s closely-watched Tankan survey showed conditions and the outlook among large manufacturers were at their weakest point since around the time the central bank launched its quantitative and qualitative easing programme in April 2013.

This may put pressure on the BoJ to take further action at its upcoming policy meeting on April 28.
Other data released during Friday’s Asian session was manufacturing PMI data out of China. The index was back in expansionary territory in March.

The official manufacturing PMI came in at 50.2 in March, versus economists’ expectations of 49.4. It was 49 in February. Any reading above 50 signals expansion. This was the first time in eight months that the reading is above 50.

For services the PMI was 53.8, compared to 52.7 in February. The services sector traditionally does a little better.

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