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Japan Service Sector Logs Moderate Growth

(RTTNews) - Japan's service sector began the third quarter with a moderate growth pace in July, survey results from IHS Markit showed Monday.

The Jibun Bank services Purchasing Managers' Index fell slightly to 51.8 in July from 51.9 in June.

A score above 50 indicates expansion in the sector. Output has risen in successive months since October 2016.

Data showed that the rate of increase in demand slowed in July to a one-year low. Further, there were signs of softening momentum as job creation and demand rose to slower extent.

Businesses remained upbeat towards the 12-month outlook. But the degree of confidence eased to a near two-year low.

The overall composite output index came in at 50.6 in July, down from 50.8 in June. The index fell to its lowest level since March as manufacturing weakness deepened.

Another concern is the size of the divergence between services and manufacturing, Joe Hayes, an economist at IHS Markit, said.

"July survey data for the latter showed no signs that the malaise has been thwarted. With the escalation of Japan-Korea tensions, softening growth in services in the run up to the sales tax increase could see recession risks become increasingly greater," Hayes added.
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