In accordance with a survey released on Tuesday, Japan's manufacturing activity increased for the first time in seven months in May, while the service sector experienced record growth, as the post-COVID recovery bolstered business conditions.

The au Jibun Bank flash Japan manufacturing purchasing managers' index (PMI) increased to 50.8 in May, up from 49.5 in April. It's the first reading above 50 since October, separating contraction from expansion.

For the first time since last June, output and new orders have returned to expansion territory.

According to the survey, supply chain disruption caused by the pandemic that ravaged the industry showed "signs of improvement."

"The Japanese private sector economy continued on an upward trajectory," said Usamah Bhatti, economist at S&P Global Market Intelligence, which compiles the survey.

"Service providers continued to report strong growth momentum with a renewed record increase in business activity, while manufacturers indicated an improvement in operating conditions for the first time in seven months," he said.

Service-sector activity expanded at the strongest pace on record in May led by the restart of both domestic and international tourism and continued recovery from pandemic disruptions, the survey showed.

The au Jibun Bank flash services PMI rose to a seasonally adjusted high of 56.3 in May, up from 55.4 the previous month.

The service sector also experienced record growth in areas such as total new business, exports, and outstanding business.

According to data released last week, visitors to Japan reached a post-pandemic high of nearly 2 million in April, owing to a relaxation of outbound travel restrictions in China.

The au Jibun Bank Flash Japan composite PMI, which measures activity in both the manufacturing and service sectors, was 54.9 in May, the highest reading since October 2013.