Japan's service growth picks up in July on upbeat demand, PMI shows
The S&P Global final Japan Services purchasing managers' index (PMI) climbed to 53.6 in July from 51.7 in June, marking the strongest expansion since February. A PMI reading above 50.0 indicates growth in activity, while that below the threshold points to contraction.
New service business orders grew at the quickest pace in three months, supported by improved customer numbers, according to the survey.
However, new export orders fell for the first time since December and at the fastest rate in over three years due to low tourist numbers in July, it showed.
Some survey respondents attributed the weak tourist figures to speculative concerns about an earthquake in July.
Employment in the service sector was unchanged from the previous month, ending a 21-month growth streak, with some respondents citing labour shortages and budget constraints as challenges to hiring.
Price pressures continued to ease in July. Input cost inflation was the slowest in 17 months, while output costs rose at the softest pace in nine months.
The composite PMI, which combines manufacturing and services, rose slightly to 51.6 in July from 51.5 in June, marking the strongest overall business activity growth since February.
"However, this reflected a steep increase in business activity at service providers, as factory output fell back into contraction...forward-looking indicators were a little less upbeat in July," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence.
The U.S.-Japan trade deal announced last month could lift Japanese firms' confidence and consumption to offer "a much-needed boost to the manufacturing economy", Fiddes added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
Indian equity benchmarks open muted as investors assess Trump's tariff threat
Aug 5 (Reuters) - India's equity benchmarks opened little changed on Tuesday after U.S. President Donald Trump reiterated his threat of harsh tariffs on goods from India over its Russian oil purchases. The Nifty 50 (.NSEI), opens new tab fell 0.01% to 24,720.25 points and the BSE Sensex (.BSESN), opens new tab lost 0.09% to 80,946.43 as of 9:15 a.m. IST. Trump on Monday threatened to raise tariffs on goods from India over its Russian oil purchases, while New Delhi called his attack "unjustified" and vowed to protect its economic interests, deepening the trade rift between the two countries. Analysts said the ongoing trade rift has hit the market sentiment, and expect the benchmarks to be rangebound until there is clarity over U.S. tariffs. Nine of the 16 major sectors logged gains at the open. The broader smallcaps (.NIFSMCP100), opens new tab and midcaps (.NIFMDCP100), opens new tab were flat.
Reuters
27 minutes ago
- Reuters
Old trees and aging farmers worsen outlook for top palm oil exporters
Malaysian smallholder oil palm farmers like Suratmen and Mohd face a dilemma that threatens to sap supply from the world's top palm oil exporters and drive up prices of the vegetable oil essential to billions of consumers worldwide in the next five years. Gabe Singer reports.
Reuters
27 minutes ago
- Reuters
Toyota, Honda brace for profit falls as US tariffs, strong yen weigh
TOKYO, Aug 5 (Reuters) - Toyota Motor (7203.T), opens new tab and Honda Motor (7267.T), opens new tab are expected to report weaker first-quarter earnings this week, as U.S. import tariffs and a stronger yen weigh on profits despite solid demand for hybrids in their biggest overseas markets. Japanese automakers face growing uncertainty in the U.S., where tariffs on imports are pushing up vehicle prices and testing the resilience of consumer demand. Investors will be watching for clues on how Japan's two largest automakers are offsetting such burdens. Toyota, the world's top-selling automaker, is forecast to post a 31% year-on-year drop in operating profit to 902 billion ($6.14 billion) yen on Thursday, according to the average estimate of seven analysts polled by LSEG. That would mark its weakest quarterly result in more than two years. Honda is expected to report a 36% decline in operating profit to 311.7 billion yen on Wednesday, its second straight quarterly drop. The automaker has already forecast a 59% fall in full-year profit. Both companies face the prospect of 15% tariffs on Japanese auto imports into the U.S. from levies totalling 27.5% previously, following a bilateral trade deal last month. Other Japanese automakers and suppliers have also flagged weaker earnings, citing the same pressures from tariffs and the stronger currency compared to the same period a year ago. "The first quarter is going to be a rough one for Toyota," said Christopher Richter, autos analyst at CLSA. "Things should get easier going forward," he said, citing some relief from the lowered tariffs. Particularly Honda's reliance on the U.S. has deepened in recent years as sales in other regions falter. Outside of the U.S., both companies produce key models for the U.S. market in Canada and Mexico. For Honda, the U.S. accounted for around two-fifths of total sales in the first half of the year. Its global sales fell 5% over the period, dragged down by double-digit declines in China, Asia and Europe. Toyota's global sales rose 6% over the period supported by strong demand for petrol-electric hybrids which typically carry higher margins than conventional petrol cars. Its Camry and Sienna hybrids remain strong sellers in the U.S. The company has also performed better in China in recent months, posting a 7% year-on-year increase in vehicle sales over the first half of the year. Honda said in May that it was scaling back its investment in electric vehicles given slowing demand and would be focusing on hybrids with various revamped models. It had earlier delayed plans to build an EV production base in Canada due to slowing demand for electric cars. Investors will be looking for updates from both companies on their pricing strategy and any revisions to full-year forecasts. The Japanese automakers have been taking measures such as transfer pricing to help alleviate the burden from the import tariffs, CLSA's Richter said. Shares of Toyota are down 16% so far this year, while those of Honda are flat. ($1 = 146.8900 yen)
