Japanese manufacturing activity contracted in April at the fastest in more than three years and output fell the most in two years, a preliminary survey showed, after earthquakes halted production in the southern manufacturing hub of Kumamoto.
The Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 48.0 in April from a final 49.1 in March.
The index remained below the 50 threshold that separates contraction from expansion for the second consecutive month and showed activity contracted the most since January 2013.
The output component of the PMI index also fell to 47.9 from 49.8 in the previous month to show the fastest contraction since April 2014.
Last Thursday the first of several earthquakes struck Kumamoto, which damaged houses, caused landslides and halted production at electronics and car parts factories in the area.
Some companies have already started to resume production, and economists say if this trend continues then Japan should be able to quickly shake off the impact on factory output.