The headline au Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) rose slightly from 48.7 in January to 48.9 in February to signal a modest, but slightly softer deterioration in manufacturing operating conditions.

The rate of decline in both output and new orders eased on the month, though the prolonged weakness in the sector pushed manufacturers to lower employment levels for the first time since last November.

Purchasing levels fell solidly, while inventories declined further. Signs of spare capacity persisted, with firms reporting that outstanding business declined solidly.

The level of positive sentiment regarding the 12 month outlook for output meanwhile slipped to the lowest since June 2020.

The au Jibun Bank Flash Japan Services Business Activity Index posted 53.1 in February, up fractionally from 53.0 in January. This indicated that business activity rose for the fourth month running and at the strongest rate since last September.

There was also a sustained expansion in new business, though the rate of increase softened slightly on the month.

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