TOKYO, Sept 1 (Reuters) - Japanese manufacturing activity expanded in August at a slightly slower pace than initially estimated, revised data showed on Monday in a sign that momentum is slowing after a sales tax increase in April.

The final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) was a seasonally adjusted 52.2 in August, versus a preliminary reading of 52.4 and a final 50.5 in July.

The index remained above the 50 threshold that separates expansion from contraction for the third straight month, and showed the fastest expansion since March.

Japanese government data last week showed industrial output was close to flat and inventories rose in July as companies misjudged the strength of domestic demand after the sales tax hike.

The economy shrank an annualised 6.8 percent in April-June, its biggest slump since the March 2011 earthquake, stoking fears that the April tax hike is causing more damage than expected.

While a bounce is likely in the second half of the year as the impact of the tax increases fades and consumers start buying again, the plunge in GDP and an uncertain export outlook have cast doubt on the strength of such a recovery.

(Reporting by Stanley White; Editing by Richard Borsuk)