Daily Management Review

With Increasing Demand, Japan's Service Sector Keeps A Steady Pace, Shows PMI Data


With Increasing Demand, Japan's Service Sector Keeps A Steady Pace, Shows PMI Data
A private-sector poll released on Wednesday revealed that Japan's service industry continued to expand quickly in June as consumer demand was rekindled by the lifting of pandemic-related restrictions.
From a record-high 55.9 in May, the final au Jibun Bank Japan Services purchasing managers' index (PMI) dropped to a seasonally adjusted 54.0 last month.
For the tenth consecutive month, that was much higher than the 50-point cutoff distinguishing expansion from contraction compared to the flash reading of 54.2.
"Japanese private sector firms remained strongly optimistic that activity would continue to expand over the coming year," as the pandemic and the inflation pressures on the economy ease, said Usamah Bhatti, an economist at S&P Global Market Intelligence.
According to the study, business forecasts for the upcoming year were also solid but slightly lower than in earlier months.
The government has cancelled severe border controls relating to the pandemic, and COVID-19 has been downgraded to the same level as seasonal flu.
Despite input inflation declining to its lowest point since March of last year, service providers reported that price pressures continued in June.
The Bank of Japan's quarterly "tankan" survey for June, which was issued on Monday, revealed that business sentiment among non-manufacturers reached its highest point since June 2019 and reached a record high.
Even though the rate of growth was the slowest in three months, the PMI survey, which followed the general trend, revealed that a recovery in inbound tourism enabled June's new export business remain in expansion for the 14th month in a row.
After peaking in May, the composite PMI, which combines the manufacturing and services activity indicators, fell down last month. The index decreased from 54.3 in May to 52.1 in June, although it continued to be over the break-even point of 50 for a sixth consecutive month.