Step-by-step explanation:
One may ask: what is a third-person narration? Well, in simple words, it refers to story-telling from the point of view of another person not involved in the said action; usually the narrator.
Therefore, by narrating "the Seventh Man" story from the third-person point of view, readers are able to better understand what is been said; as it was understood by the narrator.
Recall, that the story is a flashback of a man; the seventh man recounting his life experiences to a group of men (the observers), so the author Haruki Murakami writes as though he was in the "small house" house when the seventh man's story was being told; and so he was giving first-hand information.