TOKYO, Jan 6 (Reuters) – Japan’s service sector activity recovered in December as coronavirus curbs eased, thanks to a domestic and international tourism boom, a business survey said on Friday. shown.
The final au Jibun Bank Japan Service Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.1 from 50.3 in November, but was lower than December’s preliminary reading of 51.7.
For the fourth straight month, the index has been above the 50 mark that separates expansion and contraction.
The recovery was aided by an increase in international tourism and discount campaigns for domestic travelers, according to S&P Global Market Intelligence economist Laura Denman, who compiled the survey.
Demand for international service companies is growing at its strongest pace since July 2018, a survey showed.
Visitors to Japan soared to nearly one million in November, according to government data.
Businesses also benefited from the October launch of the National Travel Discount Program, a government-funded scheme to subsidize travel within Japan.
“Since the government-led program will continue into January, we can expect activity levels across Japan’s service sector to increase in the new year,” Denman said.
But inflationary pressures have worsened, with both input costs and invoice prices rising at their fastest rates on record.
“In addition to rising fuel, electricity and raw material costs, businesses reportedly began to feel the effects of the October minimum wage hike in December,” Denman said.
Japan’s core consumer prices rose at their fastest pace in November 1981 as more firms raised retail prices on food and energy items, driving down real wages, a barometer of households’ purchasing power.
Prime Minister Fumio Kishida and Central Bank Governor Haruhiko Kuroda on Wednesday called for higher wage increases to achieve sustained economic growth and inflation ahead of the annual spring wage negotiations between companies and labor unions. rice field.
The composite PMI, which combines manufacturing and services figures, climbed to 49.7 in December from 48.9 the previous month, due to strong growth in service sector activity. But after manufacturing activity recorded its biggest drop in 26 months, the index remained below the mark 50 that separates expansion and contraction for two months.read more
Reported by Kantaro Komiya.Edited by Kim Coghill
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