Japan flash October manufacturing PMI shows fastest expansion in nine months

October 23, 2016 8:40 PM EDT

An assembly line to produce hybrid engine's motor is pictured at Honda's transmission factory in Hamamatsu, Japan, August 23, 2016. REUTERS/Kim Kyung-Hoon

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TOKYO (Reuters) - Japanese manufacturing activity expanded in October at the fastest pace in nine months as new orders rose, a preliminary survey showed on Monday, suggesting domestic demand could lead to higher economic growth.

The Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.7 in October from a final 50.4 in the previous month.

The index remained above the 50 threshold that separates expansion from contraction for the second month and showed that activity expanded at the fastest since January.

The index for new orders rose to a preliminary 51.3 from 49.6 in the previous month, marking the first expansion in nine months.

The flash index for new export orders rose to 53.1 from a final 51.1 in September, indicating the second consecutive month of growth.

Government data on exports and household spending suggest Japan's economic growth was subdued in July-September, so the PMI survey could point to an acceleration in growth in October-December.

Japan's economic growth has been lacklustre for much of this year as consumer spending and exports largely undershot economists' expectations.

(Reporting by Stanley White; Editing by Jacqueline Wong; stanley.white@thomsonreuters.com; +81 3 6441 1984; twitter.com/stanleywhite1; Reuters Messaging: stanley.white.reuters.com@reuters.net)

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