Japan’s service sector sinks to 2 yrs low

Japan’s service sector sentiment deteriorated in May, hitting a nearly two-year low, according to government data reported by Reuters on Monday.

The survey of service-sector businesses, which gauges sentiment among service-sector firms including restaurants and taxi services, recorded a May reading of 45.7, down 1.7 points from April and the lowest level since August 2022.

This decline, reaching the weakest level in nearly two years, highlights concerns about the impact of rising inflation on household spending and casts a shadow over the Bank of Japan’s (BOJ) tightening plans.

Adding to the concerns, a separate gauge measuring firms’ outlook on the overall economic climate also dropped. This index fell by 2.2 points to 46.3 in May, marking the lowest level since July 2022 and the third straight month of decline.