Japan's private sector returned to growth territory in January as travel subsidy programme uplifted services activity, flash survey results from S&P Global showed Tuesday.
The au Jibun Bank flash composite output index advanced to 50.8 from 49.7 in the previous month. A reading above 50.0 indicates expansion.
"Similar to trends recorded over much of the past six months, a divergence between the manufacturing and services sectors has remained," Laura Denman, an economist at S&P Global Market Intelligence, said.
The service sector expanded further in January as the Nationwide Travel Discount Programme and the recent relaxation of COVID-19 related restrictions underpinned activity.
The services Purchasing Managers' Index rose to 52.4 in January from 51.1 in December.
At 48.9, the manufacturing PMI was unchanged from December, signaling the joint-strongest contraction since October 2020.
In the manufacturing sector, due to subdued demand conditions, there were sustained reductions in both output and new orders. Nonetheless, the rates of decline softened to three-month lows in both cases. Employment posted another stronger growth.
Manufacturers reported that input cost inflation sank to a 17-month low and firms lifted their selling prices at the weakest pace since September 2021. They were more positive about future activity.
In services, output and new orders grew at faster rates. Input cost inflation strengthened further, while output prices rose at the softest pace in five months.
Confidence among service providers weakened to the lowest in two years. For the first time in a year, employment levels decreased and at the fastest rate since May 2020.
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