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Japan manufacturing PMI slows in February

The Nikkei Japan Manufacturing Purchasing Managers' Index, or PMI, slipped to 54.1 in February from 54.8 in January, data from IHS Markit and Nikkei showed. A reading above the 50-point mark signals an expansion.

The rate of output growth slowed for the first time since July 2017 to a four-month low, the report noted.

New order growth was strong overall, while new business from abroad rose at a weaker pace after hitting a 92-month high in January.

Companies hired more staff at the quickest rate in 11 years amid expectations that the economy would continue to expand.

However, work backlogs rose in the month because of increased volumes of new business and delayed deliveries from suppliers.

Input costs rose "sharply" prompting manufacturers to raise selling prices.

Manufacturers remained optimistic about output over the next 12 months on expectations of a stronger Japanese economy, Olympic-Games related demand and new clients.

A stronger yen, however, could bring downward cost pressures for manufacturers, "opening the door for disinflation to creep in to consumer prices," said IHS Markit economist Joe Hayes.