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TOKYO (Reuters) - Activity in Japan's services sector accelerated from the previous month to expand at its fastest pace in almost two years, a private survey showed on Wednesday, in a sign that domestic consumption is in a healthy state.
The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) rose to a seasonally adjusted 53.3 in June from 53.0 in May as new business, outstanding business and hiring expanded.
The index remained above the 50 threshold that separates expansion from contraction for the ninth consecutive month and reached the highest level since August 2015.
"The latest PMI numbers pointed to another steady month in the Japanese economy," said Paul Smith, senior economist at IHS Markit, which compiles the survey.
"Service sector growth picked up to a 22-month high in June, which mostly offset a manufacturing slowdown."
Japanese manufacturing activity expanded at a slightly slower pace in June, a separate Nikkei Markit PMI survey showed on Monday.
Taken together, the composite PMI, which includes both manufacturing and services, fell to 52.9 from 53.4 in May.
A closely-watched Bank of Japan tankan survey showed big manufacturers are at their most confident in more than three years, highlighting recent improvements in exports and consumer spending.
Reporting by Stanley White; Editing by Richard Borsuk