Japan November PMI shows services sector growth slows slightly

Japan November PMI shows services sector growth slows slightly

TOKYO, (Reuters) – Japanese services sector activity expanded in November at a slightly slower pace than the previous month, a survey showed on Thursday, as growth in new business moderated in a sign that domestic demand may have lost a little strength.

The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.6 in November from 52.2 in October.

The index remained above the 50 threshold that separates expansion from contraction for the eighth consecutive month.

The index for new business fell slightly to 51.6 from 51.8 in the previous month.

The outstanding business component of the PMI index, however ticked up to 51.4 from 51.2 in October.

Japanese policy makers are counting on a pick-up in domestic demand & a continued expansion in the services sector to stoke a durable recovery in a sputtering economy.

Revised data due next week could show Japan avoided a technical recession in July-September as capital expenditure performed better than initially estimated.

Consumer spending was moreover strong in the third quarter, so economists will look for signs of whether consumption gathers more momentum heading into year-end.

That would moreover flow into the decision-making of the Bank of Japan, which is resisting pressure to ease monetary policy further despite few signs that inflation will climb to its targeted 2 percent in early 2017.

(Reporting by Stanley White; Editing by Shri Navaratnam)

Source: “Reuters”