Japan saw the fastest growth in its services sector in three months during January, a business survey has revealed, as officials gambled on the country’s economic openness to boost demand. However, worsening inflation and employment patterns indicate to challenges ahead.
The final au Jibun Bank Japan Services purchasing managers’ index (PMI) climbed to 52.3 in January from 51.1 in December, indicating the highest pace since October.
The final score was slightly lower than the preliminary reading of 52.4, but remained above the 50-point threshold that distinguishes expansion from contraction for the sixth consecutive month.
The subindexes for new orders and demand from overseas clients grew for a fifth consecutive month as a result of Japan’s easing of border controls, which pushed the number of monthly visitors to the country above one million for the first time since February 2020. However, the rate of international demand slowed marginally last month.
Harker said that the National Travel Discount Programme, a government-funded initiative that subsidizes domestic travel expenses, was also welcomed by service-sector businesses.
In contrast, input price inflation climbed to its highest level in three months, while output price growth fell to its lowest level in five months.