In October, the au Jibun Bank Service Purchasing Managers' Index (PMI) dropped to 51.6 from 53.8 in September, primarily due to subdued demand.
A business survey on Monday revealed that Japan's service sector grew at its slowest rate this year in October, raising concerns about the ongoing softening of the key sector driving economic growth.
In October, the au Jibun Bank Service Purchasing Managers' Index (PMI) declined from 53.8 in September to 51.6, mainly due to sluggish demand.
The index was slightly above the initial 51.1 reading and stayed above 50.0, indicating expansion in a survey by S&P Global Intelligence.
S&P Global's Economics Director, Andrew Harker, stated, "While the PMI data still look positive for Japan's service sector, recent trends show a slowdown in growth."
Despite strong consumption post-pandemic, new order growth was the weakest since January, and new export orders contracted for the first time in 14 months.
Employment saw growth, but retirements balanced the overall job creation pace, according to the survey. Business outlook, though generally positive, reached a nine-month low.
The escalating Middle East conflict and slower growth in China cast shadows over Japan, one of the world's major economies. Last week, the government put together a more than 17 trillion yen ($113 billion) set of measures to mitigate the economic impact of inflation.
Inflation pressures eased to a four-month low despite increased fuel costs and wages. The composite PMI, combining manufacturing and service activity, dropped to 50.5 in October from 52.1 in September, remaining above 50 for ten straight months.
(Exchange rate: $1 = 150.2500 yen)
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