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Japan Services PMI Rises To 52.5 In September - Markit

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Japan's services sector moved back to expansion in September, the latest survey from Markit Economics revealed on Friday, with a 16-month high services PMI score of 52.5.

The headline figure is up from 49.9 in August, and it moves back above the boom-or-bust score of 50 that separates expansion from contraction.

"With activity returning to positive growth for only the second time since the sales tax increase was implemented in April, a hoped for return to growth in Q3 seems to be firmly on the cards," said Amy Brownbill, Economist at Markit.

Among the individual components of the survey, business activity returned to modest growth, while service sector employment levels continued to rise.

Input prices in services increased at the fastest pace since September 2008.

The composite index, which combines scores from the manufacturing and services indexes, climbed to a six-month high 52.8 from 50.8 in the previous month.

Rising activity was mainly linked by respondents to increased new business. New orders grew at a solid pace during September, with the rate of expansion quickening to the sharpest pace since May 2013.

On prices, inflationary pressures persisted for both selling prices and input costs at both Japan services and goods producers.

Average tariffs set by Japanese service providers rose at a modest pace in September, while average costs faced by goods producers rose for the twenty-first successive month.

Staff numbers at Japan services rose for the third consecutive month, with the latest rise the highest observed in four months.

Volumes of outstanding business declined at Japanese goods producers for the fifth time in six months in September.

Finally, sentiment regarding the 12-month outlook for activity improved for the twenty-seventh consecutive month in a row during September.

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