Japan non manufacturing PMI

Services 51.8

  • prior 52.3

Composite 51.2

  • prior 51.2

Joe Hayes, Economist at IHS Markit:

  • "Service sector growth in Japan continued to ebb along sideways at the start of the third quarter, failing to break out of the modest expansion trend we've seen so far in the year-to-date. "However, there were some signs that the underlying services economy was beginning to lose momentum, with employment and new business growth both easing, while optimism moderated as some firms were concerned that the looming consumption tax hike could impact demand.
  • "Another concern is the size of the divergence between services and manufacturing. July survey data for the latter showed no signs that the malaise has been thwarted. With the escalation of Japan-Korea tensions, softening growth in services in the run up to the sales tax increase could see recession risks become increasingly greater."

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The data point tends not to be too much of a yen mover, but USD/JPY has already dropped on the session. Part of a borader USD move a touch weaker.