Japan December (final) Services PMI 51.1 (prior 50.3)

Earlier this week we had:

• Japan manufacturing PMI for December (final) 48.9 (vs. prior 49.0)

The preliminaries and priors for the December PMIs are here:

• Japan Jibun preliminary (flash) PMIs for December

The bump higher in the services PMI from November was helped by Japan's reopening.

• Services 51.1 (prior was 50.3)
• Composite is 49.7 (prior was 48.9)

Comments in the report :

• As has been the case since the launch of the National Travel Discount Programme in October, an uplift in tourism volumes, alongside a sustained improvement in the COVID-19 Covid-19 Covid-19 or the novel Coronavirus is a pandemic that has yielded wide ranging economic turmoil and volatility across financial markets in 2020. The first cases of Covid-19 were reported in Wuhan, China in late 2019. Since then, the virus has expanded globally, infecting millions worldwide. The virus has been extremely controversial, namely in the United States, which became heavily politicized during the 2020 presidential election. The Covid-19 pandemic is completely unprecedented in modern ti Covid-19 or the novel Coronavirus is a pandemic that has yielded wide ranging economic turmoil and volatility across financial markets in 2020. The first cases of Covid-19 were reported in Wuhan, China in late 2019. Since then, the virus has expanded globally, infecting millions worldwide. The virus has been extremely controversial, namely in the United States, which became heavily politicized during the 2020 presidential election. The Covid-19 pandemic is completely unprecedented in modern ti Read this Term situation continued to support demand conditions and reportedly led to sustained expansions in business activity and inflows of new business in December. With the government-led programme set to continue in January, we can hope to see activity levels across the Japanese service sector expand in the new year.
• Notably, despite current global conditions, demand from overseas increased at the fastest pace since July 2018.
• However, the bad news in December primarily resides with regards to cost pressures. Rates of both selling price and input cost inflation accelerated on the month with the former the fourth strongest ever recorded. Alongside increasing fuel, electricity and raw material costs, firms reportedly began to feel the effects of October’s upward minimum wage rate revision in December. As such, companies increased their charged prices at a sharper pace. Some panel members mentioned that the stronger demand conditions encouraged firms to rise prices further in an attempt to increase profitability.

-

The Bank of Japan will welcome the inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term pressures noted in the report.