STORY: Japan's factory decline is at least slowing.

Monday's closely watched Purchasing Managers' Index for manufacturing rose to 49.4 in May.

That's just below the key 50-point mark that would indicate rising activity.

But the figure was up on preliminary estimates, and the highest so far this year.

Survey compiler S&P Global Market Intelligence said the numbers pointed to improved jobs growth and a softer decline in sales.

But there's one big looming worry.

A sub-index for new orders fell for a 24th-straight month, with manufacturers citing concern over U.S. tariffs.

Donald Trump's trade policies have hit sectors including cars that are the backbone of Japan's economy.

In response, Tokyo has held four rounds of talks with Washington over a deal.

Policymakers also plan a fiscal package to support households and businesses.

Monday did see some hopeful data.

Inflation pressures eased and employment gained for a sixth month

Business confidence also rose, with strong demand for semiconductors seen among the positives in the months ahead.