Japan's service sector business activity increased in April

Following a period of stagnation in the previous month, Japan's service sector rebounded in April. However, the country's factory production continued to weaken.

The Services Purchasing Managers' Index (PMI) increased to 52.4 in April, up from March's neutral reading of 50.0.

As reported by S&P Global Market Intelligence, the recovery in Japan's service sector compensated for the poor results in manufacturing observed last month, resulting in an overall growth in the nation’s private sector output. The composite PMI rose to 51.2 in April, crossing the critical threshold of 50 for the first time in two months, compared to 48.9 in March.

Despite the uptick in activity, confidence among service providers in Japan diminished for the third month in a row. In April, the index dropped to its lowest since January 2021. Reuters notes that this reflects a general concern among Japanese firms regarding the potential effects of US import duties on the global economy.