The preliminary Markit/Nikkei manufacturing Purchasing Managers' Index (PMI) for Japan increased to 51.9 in August from 51.2 in July.

A reading below 50 indicates contraction of activity.

The index was partly driven by a rise in output, new orders and employment.

"Latest survey data indicated a further improvement in operating conditions in the Japanese manufacturing sector. New order growth accelerated to the second fastest this year so far, while production increased at a similar pace to July's five-month record," economist at Markit, Amy Brownbill, said.