Release Explanation: This report evaluates the monthly change in output that is produced by Japans service sector. Japans economy is weighs heavily on exports and because this report excludes manufacturing and only measures the services industries it is a key indicator of domestic activity.  The data is collected from wholesale and retail trade, financial services, health care, real estate, leisure, and utilities. Strong spending in the services sector usually translates to higher employment rates, and can also be a sign of strong consumer spending now and in the future.
Trade Desk Thoughts: Japans tertiary industry activity index decreased 1.6 percent for December. This report comes in as expected by economists and is the second month in a row to have such a fall. This decrease is in large part due to the growing threat of a recession in Japan that has seen a lack. Japan, which is the worlds second largest economy has shrunk at the fastest pace since 1974. The weakening demand seen in the services sector shows that households are starting to feel the pinch on the contracting economy and consumer spending will join in with exports as another drag in the economy.
Forex technical Reaction: The Japanese yen has found resistance at the neutral LFB pivot point and is currently trading at 91.70.