2018.04.0323:53:00UTC+00Japan Nikkei Services PMI Slows to 17-Month Low

Activity in Japan's service sector grew at a softer pace in 17 months in March as new business growth cooled, which indicates a slight moderation in overall economic expansion.

The Nikkei Japan services purchasing managers' index declined to 50.9 in March from 51.7 the month prior.

While the result was still ahead of the 50 point mark separating expansion from contraction and marked the eighteenth-consecutive month of growth, it was the weakest pace of expansion in services sector output since October 2016.

“The Japanese service sector lost further momentum during March … New order receipts rose, albeit only slightly and at the softest rate in a year-and-a-half”, according to Joe Hayes, economist at IHS Markit.

The index for new business eased to 51.0 from 51.9 in February, though future business expectations only dropped slightly while overall optimism levels remaining strong.

The reading for employment also increased as companies hired more workers.

The composite PMI, which includes both manufacturing and services, declined to 51.3 from 52.2 in February.

Japan's economy has grown for eight straight quarters, the longest uninterrupted streak since a 12-quarter run of expansion during the mid-to-late 1980s boom.

A final reading on a separate manufacturing survey also showed some modest loss of momentum in the factory sector, suggesting the pace of economic growth could slow over the year if consumer spending ebbs.