TOKYO (Reuters) - Japanese manufacturing activity expanded in March at a much slower pace than the previous month as domestic orders contracted in a worrying sign that the recovering economy may be losing some momentum.
The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 50.4 in March from a final 51.6 in February.
The index remained above the 50 threshold that separates contraction from expansion for the 10th consecutive month but fell to the lowest since manufacturing activity began expanding in June last year.
New orders fell to a preliminary 49.5 from 51.0 in February, contracting for the first time in 10 months.
The index for new export orders also fell to a preliminary 52.2 from a final 53.7 in the previous month, but continued to expand as the weak yen helped improve Japanese exporters' price competitiveness.
The output index fell to 52.0 in March to reach the lowest level since October last year.
The final Markit/JMMA PMI for March will be released on April 1.
Japan's economy grew much less than initially thought in the fourth quarter as capital expenditure declined in a worrying sign that a rebound in consumer spending is not encouraging business investment.
The revised fourth-quarter data joined a mixed batch of indicators over recent months that underscore a fragile recovery from a recession last year.