The preliminary Markit/Nikkei manufacturing Purchasing Managers' Index (PMI) for Japan declined to 52.4 in January from 52.6 in December.

A reading below 50 indicates contraction of activity, a reading above 50 indicates expansion.

The index was driven by a slower pace in expansion in new orders, output and employment.

"The start of 2016 was largely positive for the Japanese manufacturing sector, with latest data pointing to a solid improvement in operating conditions. Production rose at a rate little-changed from December's joint 21-month record," economist at Markit, Amy Brownbill, said.