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Japan's manufacturing activity expanded at the quickest pace in nearly three years in February, preliminary data from IHS Markit showed Tuesday.
The Nikkei Flash Manufacturing Purchasing Managers' Index, or PMI, rose to 53.5 in February from 52.7 in January. Any reading above 50 indicates expansion in the sector.
Among components, output, new orders, employment all increased at faster rates in February. Input price inflation accelerated, while output prices grew at a slower pace.
"Subsequently, business confidence was at a survey-high, with goods producers buoyed by the strongest upturn in the sector for 35 months," Samuel Agass, economist at IHS Markit, said.
