TOKYO (Reuters) - Activity in Japan's services sector expanded at the fastest pace in 19 months in March as oustanding business improved, allowing companies to charge more for their goods, a private survey showed on Wednesday.
The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) rose to 52.9 in March on a seasonally adjusted basis from 51.3 in February.
The index remained above the 50 threshold, which separates expansion from contraction, for the sixth consecutive month.
"The underlying performance of the Japanese economy continues to strengthen, with the PMI data suggestive of accelerated GDP growth during the first quarter of the year," said Paul Smith, senior economist at IHS Markit, which compiles the survey.
The index for outstanding business rose to 51.6 in March from 50.2 in the previous month to show the fastest growth in 20 months.
The business expectations index rose to 55.4 from 53.8 in February to mark the fastest growth since April last year.
Services account for around two-thirds of Japan's gross domestic product, so expansion in that sector could help overall economic growth.
While the country is seeing a modest economic recovery, the improvement has been highly dependent on a rebound in exports.
Reporting by Stanley White; Editing by Kim Coghill