TOKYO, July 24 Japanese manufacturing activity expanded at a slower pace in July than in the previous month, a preliminary survey showed on Thursday, as companies continued to adjust to fluctuations in demand after a sales tax increase in April.
The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 50.8 in July from a final reading of 51.5 in June.
The index remained above the 50 threshold that separates expansion from contraction for the second straight month.
The output component of the flash PMI index fell to 50.0 from a final 52.4 in June.
The new orders index eased to 51.1 from 52.3, indicating domestic demand moderated slightly.
However, export orders returned to growth for the first time in four months. Policymakers have been counting on an export rebound to help ease the economic pain from the sales tax hike, but overseas shipments have been stubbornly weak.
Japan's exports unexpectedly fell in June for a second straight month, data earlier on Thursday showed.
The flash PMI index is based on approximately 85 to 90 percent of total survey responses each month, and is the earliest available indicator of manufacturing sector operating conditions in Japan.
The final Markit/JMMA PMI for July will be released on August 1. (Reporting by Stanley White; Editing by Kim Coghill)