Japan’s services sector activity posted a small expansion in September after the demand recovery due to declining COVID-19 cases, as the easing of restrictions on foreign tourism as well boosted hopes of an economic revival.
Japanese Prime Minister, Fumio Kishida, vowed to raise inbound tourism spending to around 34.52 billion dollars a year, in hopes to benefit from the yen’s recent fall to a 24-year low against the dollar.
The final purchasing managers’ index (PMI) of au Jibun Bank Japan Services climbed to a seasonally adjusted 52.2, after a contraction of 49.5 in August.
The figure was in line with a 51.9 flash reading for September that was revealed last month. The 50-mark separates contraction from expansion.
Japan will loosen its border policies in a week from today, to drop a cap on daily arrivals among other rules. This comes with the hope that the yen’s sharp decline against the dollar will help lure tourists.
According to Reuters, pressure from raw material and energy prices was a concern for businesses, in addition to rising costs of utility bills, raw materials, fuel, and wages high costs.
The composite PMI returned to growth after it recorded a one-month contraction in August of last year. The index, which is estimated by using both manufacturing and services, rose to 50.1 in September in comparison to 49.4 in August.
