The seasonally adjusted manufacturing PMI rose to 50.8 in May from 49.5 in the final reading in April.
This is the first time the index has crossed the 50 threshold, which separates contraction from growth, since October.
New orders and production also returned to growth for the first time since last June.
Respondents said the supply chain disruptions caused by the COVID-19 pandemic that have hurt the sector are seeing “signs of improvement.”
The survey also showed that service sector activity in Japan grew at the fastest pace on record in May, supported by the recovery of domestic and international tourism and the continued recovery from the disruptions caused by the pandemic. .
The services sector index hit a seasonally adjusted record of 56.3 in May, from 55.4 the previous month.
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