A private business survey showed that activity in Japan’s services sector had recorded eight consecutive months of decline ended August. However, the drop came to be the mildest contraction since the coronavirus crisis started ravaging the economy, indicating that demand is gaining momentum.
The final Jibun Bank Japan Services Purchasing Managers’ Index (PMI) advanced to its sharpest in eight months, jumping from 45.0 in August to 46.9 in September. While the headline index still placed below the 50 threshold, it came higher than the 45.6 preliminary reading.
The upbeat reading indicated that demand is starting to pick up. Meanwhile, the initial reading was dragged by an accelerated drop in new orders from abroad, with firms citing weak demand conditions in export markets.