TOKYO (Reuters) - Japanese manufacturing activity expanded for the first time in seven months in September, a preliminary survey showed on Friday, in a tentative sign that economic growth could pick up pace.
The IHS Markit/Nikkei Japan Flash Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in September from a final 49.5 in August on a seasonally adjusted basis.
It is the first time in seven months that the index was above the 50 threshold that separates contraction from expansion.
The index for new export orders rose to a preliminary 50.2 from a final 47.2 in the previous month, showing the first expansion in eight months.
Japan's economic growth slowed in the April-June quarter due to weakness in consumer spending and exports. Since then, economic data has pointed to a turnaround in capital expenditure, which could support future growth.
Rising residential investment due to low interest rates could also be a positive factor for gross domestic product, some economists say.
Japan's government also has a 13.5 trillion yen ($134.27 billion) stimulus package, which should support domestic demand amid worries about overseas demand.