Staff of Reuters Read for 2 minutes TOKYO, Japan (Reuters) – The coronavirus hampered demand at home and overseas, causing Japan’s services sector to contract for the 17th month in a row in June, reflecting the world’s third-largest economy’s sluggishness. Customers at a Kura Sushi restaurant in Tokyo, Japan, eat sushi off a conveyor belt on June 3, 2021. Kim Kyung-Hoon/Reuters The decrease in the services sector maintained overall private-sector activity in negative territory for a second month, indicating that the country’s economic recovery is slowing despite progress on a coronavirus vaccination rollout. The final au Jibun Bank Japan Services Purchasing Managers’ Index (PMI) was 48.0, up from 46.5 in the previous month’s final reading and 47.2 in the flash reading. It means that services activity fell below the 50.0 threshold that distinguishes contraction from expansion for the 17th month in a row, the longest such skid since March 2010. Firms witnessed a slower drop in new business, including from overseas, according to the PMI survey, and were increasingly optimistic about forecasts for the coming year. Outstanding business, on the other hand, declined at a somewhat higher rate, implying that many businesses in the services sector are still experiencing the effects of the health crisis, despite their expectation that conditions would improve in the coming year. “As the country battled the newest wave of COVID-19 infections, businesses in the Japanese service sector stated that activity remained weak,” said Usamah Bhatti, economist at IHS Markit, which compiles the poll. “Businesses continued to expand capacity in anticipation of rising demand, though employment growth slowed to a four-month low.” Transportation, real estate, communication, information, business services, and consumer, excluding retail, are among the industries surveyed. The last au In June, the Jibun Bank Flash Japan Composite PMI, which includes both manufacturing and services, was 48.9, marking the second consecutive month of decline. Daniel Leussink contributed reporting, and Sam Holmes edited the piece./n
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