TOKYO, April 30 (Reuters) - Japanese manufacturing activity expanded in April at the fastest pace in just over a year in an encouraging sign that stabilising overseas demand and a weaker yen are helping the economy.
The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.1 in April from 50.4 in March.
The index remained above the 50 threshold that separates expansion from contraction for the second consecutive month and showed that activity grew at the fastest pace since March 2012.
“This would represent a solid growth performance, maintaining the trend that was observed in the first quarter of the year and latest anecdotal evidence suggests a weaker yen is playing a part in the expansion by raising export volumes,” said Paul Smith, senior economist at Markit.
The index for new export orders fell to 52.2 in April from 53.9 in the previous month.
The output component of the PMI index rose to 52.1 in April from 51.3 in the previous month to also show the fastest expansion since March last year.
The Japanese government’s policy mix of bold fiscal and monetary expansion pursued by Prime Minister Shinzo Abe has so far driven the yen to a four-year low against the dollar and sparked a 50 percent rally in Japanese share prices from November.