TOKYO (Reuters) - Japanese manufacturing activity expanded in March at a slightly slower pace than the previous month as growth in new orders and output slowed, a preliminary business survey showed on Friday.
The Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) fell to 52.6 in March on a seasonally adjusted basis, from a final 53.3 in the previous month.
While it remained above the 50 threshold that separates contraction from expansion for the seventh consecutive month, the reading pointed to the slowest growth in three months.
"Although signaling a slower rate of expansion during March, the latest PMI data again point to a Japanese manufacturing economy expanding at a decent clip," said Paul Smith, senior economist at IHS Markit, which compiles the survey.
The reading for output fell to 53.4 from a final 54.1 in February, but still showed expansion for the eighth consecutive month.
A sub-index for new orders fell to 52.9 from a final 54.2 in February.
New export orders eased to 52.7 from a final 54.3 in February.
Input prices continued to rise but output prices fell marginally, suggesting pressure on profit margins. But companies surveyed continued to report solid job creation.
Many Bank of Japan officials say they are more confident about prospects of economic recovery as exports and factory output benefit from improving global demand.
But fears of U.S. protectionism are clouding the outlook for global trade, and Japanese consumer demand remains weak.