The final Markit/Nikkei services Purchasing Managers' Index (PMI) for Japan fell to 51.5 in December from 51.6 in November.

A reading above 50 indicates expansion in the sector, a reading below 50 indicates contraction of activity.

The index was driven by a rise in new orders.

"New business growth in the service sector accelerated to a four-month high in December, supporting a further increase in both output and employment," economist at Markit, Amy Brownbill, said.