Comments from IHS Markit:
- “The Japanese services economy signalled that demand conditions remained subdued in the wake of a resurgence in COVID-19 cases in July. Latest PMI data indicated quicker reductions in both business activity and new orders, as panel members highlighted ongoing restrictions to curb the spread of the virus had dampened client confidence and sales.
- “Moreover, lower demand led Japanese service providers to decrease staffing levels for the first time since December 2020, while firms also noted softer, albeit still strong optimism regarding the year ahead outlook for business activity.
- “Overall private sector activity remained in contraction territory in July, as a modest upturn in manufacturing output was offset by an accelerated fall in the larger services sector.
Bolding is mine. With ongoing deterioration in the coronavirus situation in Japan it seems unlikely August will be much better.
USD/JPY is barely changed in the wake of this data, circa 108.98