Japan March final manufacturing PMI falls to 50.3 as domestic orders contract

TOKYO (Reuters) - Japanese manufacturing activity expanded more slowly in March than in the previous month as domestic orders contracted for the first time in almost a year, in a worrying sign that the recovering economy may be losing momentum. The final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) was 50.3, just below the preliminary reading of 50.4 and below 51.6 in February. The index remained above the 50 threshold that separates expansion from contraction for the 10th consecutive month. The new orders index was revised down to 49.4 from a preliminary 49.5, confirming that orders contracted for the first time in 10 months. The reading suggested weaker domestic demand, as export orders rose, albeit at a only a fractional pace. The output component of the PMI index was unchanged at 52.0, the lowest level since October last year. Japan's economy has emerged from last year's mild recession as the weak yen lifts exports and corporate profits. But household spending remains weak and inflation has ground to a halt, keeping alive expectations the Bank of Japan will ease monetary policy again sometime this year. (Reporting by Stanley White; Editing by Kim Coghill)