Japan Services Sector Maintains Growth Momentum

Japan’s S&P Global Services PMI fell to 52.8 in March 2026 from a final 53.8 in the previous month, according to preliminary data. The latest reading marked the weakest since December, partly reflecting concerns over the ongoing conflict in the Middle East. New orders expanded at the slowest pace since October, with foreign demand rising only marginally despite a slight improvement. Employment growth also eased during the month. On the price front, input cost inflation accelerated, while output charges increased at a softer pace. Meanwhile, business confidence weakened, weighed by heightened geopolitical risks and uncertainty.

Japan’s S&P Global Services PMI rose to 53.8 in February 2026, confirming preliminary estimates, and up slightly from January’s 53.7, marking the fastest pace since May 2024. Growth was supported by a solid rise in new orders, the most pronounced since April 2024, driven mainly by stronger domestic demand and new client wins. Backlogs of work accumulated at a solid pace, the fastest since June 2023, as firms contended with rising workloads. Employment growth slowed to a three-month low due to labor shortages and staff turnover, although it remained above the survey’s long-run average. Input costs rose sharply, climbing at a historically fast rate, while selling prices increased at the quickest pace since April 2014 as companies passed on higher costs to customers. Business confidence strengthened, with firms expressing optimism for continued growth over the next 12 months, supported by improving demand and investment in new capacity.

Japan’s S&P Global Services PMI inched up to 53.8 in February 2026 from 53.7 in the previous month, a flash figure showed. The latest result marked the highest figure since May 2024, with new orders rising at the fastest pace in nearly two years. Employment continued to expand, though hiring slowed slightly from the prior month. On the price front, service providers reported a sharper increase in selling prices than manufacturers, underscoring mounting cost pressures across the sector.