TOKYO, Feb 27 (Reuters) - Japanese manufacturing activity contracted for a 12th straight month in February, a survey showed on Friday, underscoring that the world's second-largest economy remains in the grip of the global economic crisis.
Although the Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) edged up to a seasonally adjusted 31.6 from a record low of 29.6 in January, it remained well below the 50 threshold that separates contraction from expansion.
"It (the PMI index) remained below the critical no-change mark of 50.0 and continued to show that the manufacturing sector declined at a steep pace," said Minoru Nogimori, an economist at Nomura Securities.
"However, the improved February reading is an encouraging sign that the dramatic deterioration in Japanese manufacturing activity may be slowing," he said.
The PMI index rose for the first time in seven months.
The output component of the index rebounded to 22.7 in February from a record low of 18.5 logged in January. The survey began in October 2001.
A sharp decline in overseas demand has dealt a severe blow to Japan's manufacturing sector, which accounts for about 20 percent of gross domestic product, prompting companies to slash production and jobs.
Japan's exports nearly halved in January from a year earlier, pushing its trade deficit to the biggest on record.
Japanese industrial output is expected to have fallen 10 percent in January, a Reuters poll showed, an even deeper fall than that seen in December.
The country's GDP marked the steepest drop in about 35 years in October-December, government data showed on Feb. 16, highlighting the export-oriented economy's vulnerability to the global economic downturn.
January data for industrial output will be released on Friday at 8:50 a.m. (Thursday 2350 GMT). (Reporting by Yuzo Saeki)