TOKYO, Sept 21 (Reuters) - - Japanese manufacturing activity grew at a slightly faster pace in September as domestic and export orders picked up, but business confidence fell to the lowest in nearly two years amid global trade tensions, a private survey showed on Friday.
The Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to 52.9 in September on a seasonally adjusted basis from a final 52.5 in August.
The index remained comfortably above the 50 threshold that separates contraction from expansion for the 25th consecutive month.
Total new orders rose at the fastest pace in five months, while export orders returned to expansion territory but only marginally.
But a sub-index measuring expectations for future output fell to a preliminary 55.9, the lowest sentiment reading since November 2016, from a final 57.1 in August.
“Growth in the goods-producing sector continues to be supported by increases in new orders,” said Joe Hayes, economist at IHS Markit, which compiles the survey.
“That said, business sentiment dipped further...as firms remain uncertain to how international trade tensions could impact the Japanese economy.”
China and the United States plunged deeper into a trade war on Tuesday after Beijing added $60 billion of U.S. products to its import tariff list in retaliation for President Donald Trump’s planned levies on $200 billion worth of Chinese goods.
Japan exports a lot of electronics and manufacturing equipment to China, which are used to make finished products that are shipped to the United States, so a reduction in Chinese exports to the United States could hurt Japanese companies.
The survey also showed Japanese factories were facing the sharpest input cost inflation since March 2011.
Reporting by Stanley White; Editing by Kim Coghill; email@example.com; +81 3 6441 1984 twitter.com/stanleywhite1; Reuters Messaging: firstname.lastname@example.org