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Japan Service Sector Activity Contracts In June

Japan's service sector activity declined further in June, results of a survey by Markit Economics showed Thursday.

The Markit Japan Services PMI edged down to 49.0 in June from 49.3 in May, signaling contraction for the third consecutive month. The decrease in service sector output was driven by the recent increase in sales tax, the survey showed.

Staffing levels declined for the first time since December 2013 in May. Input costs, which have been on the rise since November 2012, continued to increase and output prices grew for the fifth successive month in May, marking the longest stretch of inflation in survey history for both.

In contrast to the decreasing trend, new orders increased for the first time in three months in May.

Perceptions on business activity for the upcoming year were more positive than in the current year.

The composite output index, a combined measure of manufacturing activity and service sector activity, came in at 50 in May, indicating stagnation. In April, the index posted 49.2.

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