Japan services activity expands for fifth month, PMI shows

TOKYO, Nov 5 (Reuters) - Japan's service ‌sector expanded ​modestly in ​October as activity and new orders both rose slightly faster, a business survey showed on Thursday.

• The S&P Global final Japan ‌Services Purchasing Managers' Index (PMI) edged higher to 51.7 in October from ⁠51.3 in September, a survey by S&P Global showed, marking a fifth straight month of expansion ‌but coming in below the ‌flash reading of 52.0. The 50-mark separates growth from contraction

• New orders increased for a 28th straight month, with the pace of growth picking ​up from September, as firms cited firmer domestic demand, new clients and business development efforts as factors

• In contrast, foreign demand remained weak, though the ⁠decline in new export orders eased to its slowest since April

• Cost pressures eased further, with input ​price inflation decelerating for a fourth straight month to an eight-month low. Output price inflation also moderated, although charges have now ​risen every month for the past four ‌and a half years

• Business confidence weakened to its lowest level since March, as concerns over inflation, an ageing population ⁠and labour shortages tempered optimism about growth in the defence and technology sectors, business expansion plans and increased tourism

• Persistent inflation "could also constrain demand and hiring in the months ⁠ahead," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence

• "Whether growth loses further ​momentum and cost pressures ease will be important considerations for the Bank of Japan as it assesses further policy tightening," Fiddes added

• Employment rose only marginally, marking the weakest pace ‌of job creation in the current 14-month hiring stretch, the survey showed. Companies cited expansion plans as factors for ‌additions, while resignations and retirements limited overall headcount growth

• Japan's composite output index slipped ⁠to 52.1 from 52.3, its softest ‌growth pace since May. ​Stronger growth in services activity was countered by a slowdown in manufacturing output, sector data showed

(Reporting by Satoshi Sugiyama; Editing by ‌Jacqueline Wong)

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