Japan services sector growth picks up in January

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Growth in Japan’s service sector growth picked up in January as a gauge of industry activity remained in expansionary territory for a sixteenth consecutive month.

The Nikkei-Markit services purchasing managers’ index rose to 51.9 from 51.1 in the previous month. The reading, which is based on a sector survey, was at its highest in three months and remaining above the 50-point level separating expansion from contraction.

Joe Hayes, economist at IHS Markit noted that business optimism was at its highest in more than four years and input cost inflation lifted at the sharpest rate since 2008.

“[With] PMI and official data signalling sustained increases in output and employment, domestic inflationary pressures are not lacking,” Mr Hayes said. “A continuation of yen appreciation against the US dollar could undermine the BoJ’s commitment to ultra-loose monetary policy, however.”

Source: FINANCIAL TIMES