In August, the Japanese services sector grew at the sharpest rate seen since October 2017. The Jibun Bank Japan services PMI soared to 53.3 in August from 51.8 in July, driven by a higher rate of expansion in the services industry.

New business has increased considerably in the services industry in Japan, while new business from overseas also rose at the fastest pace in nine months. With backlogs at work also rising, hiring in this sector has also been boosted. Outstanding business in the services sector has also grown at the fastest rate seen in six months and businesses are expecting output to continue rising over the next year.

The composite PMI, which combines the performance of both the manufacturing as well as services sectors, has climbed higher to 51.9 in August from 50.6 in July, the fastest rate of expansion seen in the Japanese markets since December 2018. The news has caused a slight strengthening in the Japanese yen much, with USD/JPY trading  somewhat bearish at around 105.978 at the time of writing.