The preliminary Markit/Nikkei manufacturing Purchasing Managers' Index (PMI) for Japan declined to 52.5 in December from 52.6 in November.

A reading below 50 indicates contraction of activity.

The index was partly driven by a rise in new orders and backlogs of work.

"Operating conditions at Japanese manufacturers continued to improve at a solid rate in the final month of 2015. Despite easing, the rate of expansion in production was robust overall," economist at Markit, Amy Brownbill, said.