TOKYO Feb 28 Japanese manufacturing activity in
February pulled back from an eight-year high set the previous
month, a survey showed on Friday, suggesting a slight slowdown
in factory output before a sales tax increase in April.
The Markit/JMMA Japan Manufacturing Purchasing Managers
Index (PMI) fell to a seasonally adjusted 55.5 in February from
56.6 in January.
The index remained above the 50 threshold that separates
expansion from contraction for 12 straight months but declined
for the first time in seven months.
"April's forthcoming sales tax hike looks set to test the
current sequence of expansion, particularly given the recent
slowdown evident in new export order growth, indicating that the
current expansion is primarily driven by domestic demand," said
Paul Smith, senior economist at Markit.
The index for new export orders fell to 51.5 from 52.8 in
the previous month for the third consecutive month of declines.
The output component of the PMI index fell for the first
time in two months to 58.4 from 61.1 in January, which is the
highest since the data series began in October 2001.
Prime Minister Shinzo Abe's government will raise the 5
percent sales tax to 8 percent in April to pay for rising
Since the middle of last year, sales of apartments, houses,
cars and durable goods have been rising as consumers look to buy
big-ticket items before the tax increase.
Some economists worry the tax hike may hit consumption
harder than expected later this year, and speculate the Bank of
Japan may need to ease monetary policy. There are already signs
momentum is stalling, with the economy growing at a much slower
pace than expected at the end of last year.
However, many BOJ officials have recently played down the
need for more easing, arguing that the tax hike will have only a