The final Markit/Nikkei services Purchasing Managers' Index (PMI) for Japan increased to 52.2 in October from 51.4 in September.

A reading below 50 indicates contraction of activity.

The increase was driven by a stronger rise in new orders.

"Growth of the Japanese service sector improved at a faster rate in October, underpinned by a sharper rise in new orders. Despite this, employment levels declined at the fastest rate since December 2011, although this led consequently to an accumulation in volumes of unfinished work," economist at Markit, Amy Brownbill, said.