Japan's tertiary industry activity index declined a seasonally adjusted 0.7 percent on month in September, the Ministry of Economy, Trade and Industry (METI) said in a report on Friday.
The index in the recording period stood at 97.7, falling short of consensus forecasts for a 0.5 percent retreat and follows an unchanged reading in August, according to the ministry's latest data.
According to the latest government figures, the unadjusted index fell 0.4 percent to 98.9 in September from a year earlier, marking the first fall in two months, after increasing 0.5 percent in August from a year earlier.
Industries contributing to the decline included retail trade, communications, personal services and finance, according to METI's statistics, while those comprising an increase included scientific research, technical services, utilities, accommodations and compound services.
The data showed that shipments here of LCD TVs and air conditioners dropped during the recording period and helped drag down the index, while unseasonable weather dampened consumers' retail sentiment, the ministry also said.
The tertiary, or service sector of the economy is one of the three economic sectors in Japan, with the secondary sector being manufacturing and the primary sector involving agriculture, fishing, and mining.
Japan's service sector comprises "soft" parts of the economy including activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability -- characterized by the production of services rather than end products specifically.
The tertiary sector of industry in Japan involves the provision of services to other businesses as well as to final consumers and such services may involve the transportation, distribution and sale of goods from producer to a consumer and service provision is also included in this sector, as is the case in the restaurant industry.
The service sector employs more than 50 percent of Japan's entire workforce and spending on services such as dining, retail and travel is directly pegged to positive and negative fluctuations in consumer confidence and income.