Japan Services PMI Activity Subdued in July

Japan’s services sector activity had slightly slowed down in July compared to the month of June, considering the sluggish growth momentum on new orders shown in the private poll issued on Friday. This reflects that the Japanese economy lose its strength at the onset of the Oct-Dec quarter.

The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) slumped to 51.3 based on seasonal adjustments from 51.4 in June, nevertheless, the figure remained higher than the the 50 threshold that separates expansion from contraction for 22 months in a row.

New and outstanding businesses also demonstrated slackening growth which indicates rather subdued activity, according to a separate survey made earlier this week on the country’s manufacturing activity. This further shows that the factory activity came in lower than the initial report in the previous month, along with some economic issues brought by the pace reduction that caused new orders to expand.

Moreover, the composite PMI that comprises of manufacturing and services had declined to 51.8 versus 52.1 in June.

Japan’s economy is projected to rebound in Q2 following the downturn in Q1, however, the American-driven global trade war served as a risk towards growth according to experts. Japanese exports to the U.S had decreased for the first time in a span of 17 months, and Japan’s business sentiment exacerbated due to concerns about the “America First” protectionist trade policies imposed by the U.S. President Donald Trump.