TOKYO Activity in Japan's services sector expanded at a slightly slower pace in April as new business growth slowed, a private survey found on Tuesday - a sign that the broader economy could be losing some momentum.
The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) fell TO 52.2 from 52.9 in March on a seasonally adjusted basis.
The index remained above the 50 threshold, which separates expansion from contraction, for the seventh consecutive month.
"A slightly softer trend in new business suggests that Q2 overall may not be quite as strong as the first quarter, but with jobs being created and confidence in the future sustained, the fundamentals for ongoing expansion remain in place," said Paul Smith, senior economist at IHS Markit, which compiles the index.
The index for new business fell to 52.2 from 52.8 in March, while the business expectations index eased slightly to 55.0 from 55.4 in that month.
Services account for around two-thirds of Japan's gross domestic product, so expansion in the sector would support overall economic growth.
Japan's economy is seeing a modest recovery, although the improvement has been highly dependent on a rebound in exports.
Japanese manufacturing activity expanded at a stronger pace in April as export orders increased, a revised survey showed on Monday, suggesting firms' output remains on track to rise thanks to overseas demand.
The Final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) was 52.7, slightly below a preliminary 52.8 but still above the 52.4 notched in the previous month.
(Reporting by Stanley White; Editing by Eric Meijer)