TOKYO, July 31 Japanese manufacturing activity in July grew at the slowest pace in four months in a sign that firms are curbing production due to slowing growth in exports.
The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 50.7 in July from 52.3 in June.
The index remained above the 50 threshold that separates expansion from contraction for a fifth consecutive month, but showed that growth had slowed to the lowest level since March.
"After a promising second quarter, Japan's manufacturing expansion slowed in July," said Claudia Tillbrooke, economist at Markit.
"The decelerating growth of output and new orders, combined with falling employment, painted a less encouraging picture than that indicated by previous surveys."
The index for new export orders fell to 51.1 from 52.1 in the previous month.
The output component of the PMI index also fell in July to 50.8 from 52.7 in June to mark the slowest growth in five months.
Data on Tuesday showed Japan's industrial output fell at the fastest pace in more than two years in June as companies curbed production to avoid a build up in inventories, but an improving labour market suggested the economy was on track for gradual improvement.