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The Jibun Bank Services PMI, a key indicator of business activity in Japan's service sector, fell short of expectations. It dropped to 53.1 in September, below the forecasted 53.9 and down from 53.7 in August. This decline points to a slowdown in growth, although the index remains above the 50 mark, indicating expansion.
On the investment front, foreign investment in Japanese stocks saw a notable increase of ¥757.9 billion on September 27, a sharp rebound from the ¥1.926 trillion drop in the previous report. This reflects renewed foreign investor interest in Japanese equities, likely influenced by the weaker yen, which makes Japanese assets more attractive to foreign investors. However, the demand for Japanese bonds did not fare as well, with foreign bond buying showing a decline of ¥58.0 billion, compared to a ¥774.9 billion increase in the previous month.
This mix of data contributed to a drop in Japan's 10-year Government Bond (JGB) yields, which fell to 0.871%, reflecting softer demand for bonds and potentially indicating concerns about future economic performance.
Overall, the weaker yen has had a mixed impact, boosting stock investments but leading to reduced interest in bonds and a drop in yields, amid signs of slowing growth in the services sector.
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