May 21, 2015 / 1:43 AM / 2 years ago

Japan May flash manufacturing PMI back in expansion territory as orders pick up

A worker cuts a metal at a sheet metal processing company Yamada Manufacturing in Daito, Osaka prefecture, December 10, 2013. REUTERS/Yoko Kubota

TOKYO (Reuters) - Japanese manufacturing activity rebounded modestly in May as output and new orders picked up, suggesting a much-needed improvement in demand at home and abroad.

The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 50.9 in May from a final 49.9 in April.

The index returned above the 50 threshold that separates contraction from expansion for the first time in two months.

The output index also rose to a preliminary 51.7 in May, after shrinking in April.

New orders rose to a preliminary 51.2 from 48.8 in April, ending two months of declines.

New export orders rose modestly to 50.5 from a final 50.3 in the previous month, but expanded for the 11th consecutive month.

The final Markit/JMMA PMI for May will be released on June 1.

Japan’s economy expanded in January-March at the fastest pace in a year, but much of the growth came from inventories, data showed on Wednesday.

Private consumption, housing investment and exports all rose but at a feeble pace, leaving policymakers with more work to do two years after a radical monetary stimulus program has brought only scant success.

The flash PMI data for May would suggest there is a good chance that the economy continued to expand in the current quarter.

Reporting by Stanley White; Editing by Kim Coghill

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