TOKYO, (Reuters) - Growth in Japan’s services sector eased slightly in November but remained near six-month highs, bolstering views that the economy is recovering from a recent soft patch, a private survey found.
The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) stood at 52.3 on a seasonally adjusted basis, slipping only marginally from October’s six-month high of 52.4.
It marked the 26th straight month that the index held above the 50 threshold that separates expansion from contraction.
The latest data underlined the resilience of Japanese business activity, which staged a solid rebound in October from the damage caused by natural disasters that disrupted factory operations and deliveries in September.
The services data builds “a stronger case for a rebound in the Q4 GDP number,” said Joe Hayes, economist at IHS Markit, which compiles the survey.
A preliminary estimate out last month showed Japan’s economy contracted by an annualised rate of 1.2 percent in the third quarter.
Hayes said reports from panel members suggested that demand was solid enough for companies to raise prices.
If core inflationary pressures on the service-side of the economy builds, that bodes well for the Bank of Japan as it struggles to accelerate inflation to its 2 percent target, despite more than five years of massive monetary stimulus.
The composite PMI, which includes both manufacturing and services, fell to 52.4 in November from the previous month’s 52.5.
A separate survey on Japan’s manufacturing PMI showed on Monday that manufacturing activity expanded at the slowest pace in more than a year in November as growth in new orders slowed.
Reporting by Tetsushi Kajimoto; Editing by Kim Coghill