2019.07.2323:05:00UTC+00Japan Private Sector Growth Improves In July

Japan's private sector activity growth improved in July driven by the service sector, flash survey data from IHS Markit showed Wednesday.

The Jibun Bank flash composite output index rose to 51.2 in July from 50.8 in June. A reading above 50 indicates expansion in the sector.

Composite 'flash' data for Japan show a moderate improvement in private business output in July, with consumption of services supporting the economy, as it has done in the year-to-date, Joe Hayes, an economist at IHS Markit, said.

Overall private sector output expanded at the fastest pace in seven months on the back of faster growth in services activity.

The services Purchasing Managers' Index climbed to 52.3 from 51.9 a month ago. The score was the joint-highest since October 2018.

Although the manufacturing PMI rose to 49.6 from 49.3 in June, the score suggested contraction. The factory PMI has remained below the neutral 50 for the third consecutive month.

Hayes said heightened frictions between Japan and South Korea added downside risk to the manufacturing supply chain in Japan, creating additional slack that services may once again have to compensate for.