A Honda motorcycle assembly line. Japan's manufacturing sector operates under a different model than that followed in much of the West. Photo: Reuters / Naomi Tajitsu

Nomura reports that Japan’s manufacturing sector BSI fell to from +7.5ppt in the last survey to +1.1ppt, while nonmanufacturing BSI was up from +0.7 to +1.5ppt. Demand and overseas forex rates both led to improvement in sentiment, but costs related to the shortage of labor likely pushed down manufacturing numbers.