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Jibun Bank/IHS Markit Japan's final manufacturing purchasing managers' index (PMI) rose to 51.4 in February from 49.8 in January, the highest since December 2018, according to a survey released on Monday.
Of this total, new orders grew at the fastest pace since October 2018, while output grew for the first time since December 2018.
The survey results are in line with January output released last month and GDP data for the fourth quarter of last year, indicating that Japanese manufacturing has successfully withstood the impact of emergency epidemic prevention measures, mainly due to strong overseas demand for technology components.
However, the report also showed that producers were facing a sharp rise in input prices, the biggest increase since February 2019, putting pressure on their profit margins.