"There have been some concerns about overseas economies and a strong yen hurting earnings, but capital expenditure seems to be holding up".
- Shuji Tonouchi, Mitsubishi UFJ Morgan Stanley.
Japan's tertiary industry activity index increased at a faster than expected pace during the sixth month of the year, fresh figures from the Ministry of Economy, Trade and Industry (METI) revealed on Wednesday. According to METI's report, the Tertiary Industry Index, which measures the change in the total value of services purchased by businesses, rose 0.8% month-over-month on a seasonally adjusted basis in June, compared to the previous month's downwardly revised drop of 1.2%, while market analysts expected a gain of 0.3% in the reported month. Activity was up for medical, health care and welfare, living and amusement-related services, wholesale trade, transport and postal activities and business-related services. In the meantime, activity was down for electricity, gas, hear supply and water, information and communications, retail trade, finance and insurance.
Year-over-year, the Tertiary Activity Index climbed 0.4% in June, following the preceding month's increase of 0.3%. Also on today, Japan's core machinery orders advanced 8.3% in June, after falling 1.4% last month, while economic desks pencilled in an acceleration to 3.4%. Some of the latest reports suggest that the Bank of Japan's September review could make bond purchase target more flexible, whereas the recent data overall boosted confidence in the Japanese economy.
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