Markit Economics released its preliminary manufacturing purchasing managers' index (PMI) for Japan on Thursday. The index rose to 50.3 in May from 49.9 in April.

A reading above 50 indicates expansion.

The increase was driven by higher output and new orders. The output index increased to 51.7 in May from 49.3 in April, while new orders climbed to 51.2 from 48.8 in April.

"Reflective of an overall improvement in operating conditions at Japanese manufacturers was a return to growth of both production and new orders in May," said Markit economist Amy Brownbill.