TOKYO, June 21 Reuters Japan39;s factory activity expanded for a second straight month in June but the pace of growth eased as orders weakened and cost pressures intensified, a business survey showed on Friday.

The au Jibun Bank flash Japan manufacturing purchasing managers39; index PMI stood at 50.1 in June, down slightly from 50.4 in May, but still above the 50.0 threshold separating growth from contraction on a monthly basis.

Japan39;s private sector expansion stalled midway into the year, said Jingyi Pan, economics associate director at SP Global Market Intelligence, which compiled the survey.

But growth in the manufacturers39; output offered some room for optimism, she added.

The key subindex of output expanded in June for the first time since May 2023, the survey showed.

However, an index of new orders dipped in June from the previous month.

The pressure on margins for Japanese firms was concerning, Pan said.

Price pressures strengthened in the manufacturing sector as the average input costs and output prices increased at a faster pace in June than the previous month.

Manufacturers39; optimism in the next 12 months rose despite the slowdown in new orders, according to the survey.

Service sector business activity fell in June for the first time in about two years amid subdued new business.

The au Jibun Bank flash services PMI shrank to 49.8 in June from 53.8 in May. The index contracted for the first time since August 2022.

Japanese service providers…