The Japanese private sector witnessed a slight expansion in December, signaling a potential recovery, according to the latest data from S&P Global.

Services Sector Growth: The Jibun Bank Japan Services Business Activity Index climbed to 51.4 in December, up from 50.5 in the previous month. This marks a positive shift above the neutral 50 mark, indicating an increase in services sector activity.

Manufacturing Sector Struggles: Meanwhile, the Manufacturing PMI rose marginally from 49.0 in November to 49.5 in December. Despite the improvement, it remains below the neutral 50 mark, reflecting a continued contraction in manufacturing output.

Composite PMI Improvement: The composite PMI, which combines data from both sectors, rose from 50.1 in November to 50.8 in December, suggesting a slight overall expansion in the private sector.

Economist Usamah Bhatti at S&P Global Market Intelligence noted, "The December flash PMI data indicates a modest expansion in Japanese private sector activity, the most pronounced since September. While the services sector accelerated, manufacturing output remained subdued, marking a fourth consecutive month of contraction."