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Japan's manufacturing activity expanded at the weakest pace in six months in May, preliminary data from IHS Markit showed Tuesday.
The Nikkei Flash Manufacturing Purchasing Managers' Index, or PMI dropped to 52.0 in May from 52.7 in April. However, any reading above 50 indicates expansion in the sector.
Among components, output, new orders, employment all increased at slower rates in May. The rate of job creation across the sector was the weakest since November 2016.
"Although growth is being maintained at a decent clip, reports of "wait-and-see" attitudes amongst clients, excess warehouse inventories and recent sharp rises in raw material costs all served to undermine expansion during the month," Paul Smith, Senior Economist at IHS Markit, said.