TOKYO, (Reuters) - Japanese manufacturing activity expanded for the first time in seven months in September, a private business survey showed on Monday, in a tentative sign that the sputtering economy may be slowly regaining traction.

The IHS Markit/Nikkei Japan Final Manufacturing Purchasing Managers Index (PMI) rose to 50.4 in September on a seasonally adjusted basis, versus a preliminary reading of 50.3 and a final 49.5 in August.

The 50-point level separates contraction from expansion on a monthly basis.

Output increased for the second month in a row. While the gain was marginal, it was enough to spur the quickest pace of job creation since May.


New export orders rose for the first time in eight months but overall new orders shrank, pointing to still tepid domestic demand.

The final index for new export orders was 51.1, above a preliminary 50.2 and above a final 47.2 in the previous month.

Japan's economic growth slowed in the April-June quarter due to weakness in consumer spending and exports. Since then, there has been some positive data on capital expenditure, but consumer spending and consumer prices have disappointed.

Japan's government also has a 13.5 trillion yen stimulus package, which should support domestic demand amid worries about overseas demand.

(Reporting by Stanley White; Editing by Kim Coghill)

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