TOKYO (Reuters) - Japanese manufacturing activity expanded in May at the fastest pace in almost a year as a weak yen and increased demand in the United States and China lifts exports.
The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.5 in May from 51.1 in April.
The index remained above the 50 threshold that separates expansion from contraction for the third consecutive month and showed that activity expanded at the fastest pace since August 2011.
The data will be a welcome sign for Japanese Prime Minister Shinzo Abe. The premier’s fiscal and monetary expansionary policies, dubbed “Abenomics,” have helped improve sentiment and weaken the yen.
The report also adds to the recent series of data showing the early benefits of Abe’s policies that’s aimed at vanquishing 15 years of entrenched deflation and putting Japan back on to a sustainable growth path.
“Markit’s Japan Manufacturing PMI for May indicated that the ‘Abenomics’ bounce is showing little sign of running out of steam as we head towards mid-year,” said Paul Smith, senior economist at Markit.
The index for new export orders rose to 52.6 from 52.2 in the previous month.
The output component of the PMI index also gained to 52.5 from 52.1 in April, to show output grew at the fastest pace since October 2011.
Reporting by Stanley White; Editing by Shri Navaratnam