TOKYO -- The Nikkei Japan Manufacturing Purchasing Managers' Index, or PMI, dropped to 52.4 in March from 53.3 in February.
A reading above 50 signals an improvement, while one below 50 points to a contraction in activity. March's PMI recorded the above-50 level for the seventh consecutive month.
The latest data signaled a slower rate of growth but rounded off a solid quarter, according to IHS Markit, which compiles the survey. Senior Economist Paul Smith pointed out that Japan's manufacturing sector was growing at a quarter-to-quarter rate of around 2%.
"And growth is likely to have some near-term sustainability: exports are rising at an underlying rate of close to 3%, and overall demand is being driven by a desire amongst manufacturers' clients for capital products," the economist added.
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