Survey data indicated softer growth momentum in the Japanese manufacturing sector during May, reversing the acceleration recorded in April. Although both output and new orders continued to rise, the rates of expansion weakened. In turn, backlogs of work were accumulated at a slower pace, prompting a moderation in the rate of job creation. Meanwhile, material shortages led to both longer supplier delivery times and greater input prices. Firms responded by modestly raising selling prices.

The headline Nikkei Japan Manufacturing Purchasing Managers' Index - a composite single-figure indicator of manufacturing performance - fell to 52.8 in May, from 53.8 in April, signalling a slower rate of improvement in the Japanese goods producing sector.