According to a private-sector survey on Wednesday, Japan’s service activity continued to grow at a brisk pace in June. This growth was attributed to the easing of pandemic-related restrictions, which revived consumer demand.
The final au Jibun Bank Japan Services purchasing managers’ index (PMI) for June was 54.0, a slight decrease from the record-high 55.9 in May. However, it remained well above the 50 threshold that separates expansion from contraction for the 10th consecutive month. The flash reading had initially indicated a PMI of 54.2.
Usamah Bhatti, an economist at S&P Global Market Intelligence, mentioned that Japanese private sector firms maintained a strong optimism about future expansion. This optimism is based on expectations of easing pandemic conditions and inflation pressures on the economy.
The survey also indicated that business expectations for the coming year remained firm, although slightly lower compared to previous months.
The Japanese government has eliminated strict pandemic-related border controls and reclassified COVID-19 at the same level as the seasonal flu.
Service providers reported persistent price pressures in June, despite a drop in input inflation to its lowest level since March of the previous year.
A quarterly Bank of Japan “tankan” survey for June, released on Monday, revealed that non-manufacturers’ business sentiment reached its highest level since June 2019. Additionally, an index reflecting sentiment among hotels and restaurants reached a record high.
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