Japan Services PMI Revised Downward

Japan’s S&P Global Services PMI rose to 53.7 in January 2026, surpassing the flash estimate of 53.4 and December’s 51.6. The latest result marked a tenth consecutive month of expansion in services activity and the fastest pace since February 2025. Growth was fueled by stronger new orders, the quickest in four months, supported by marketing successes, new client wins, and firmer foreign demand. At the same time, backlogs accumulated at the sharpest rate since last September, prompting firms to expand capacity through hiring. Although job creation slowed from December, employment remained solid. On the price front, input cost inflation eased to its lowest in nearly two years, but selling price inflation climbed to a seven-month high as firms passed on costs. Looking ahead, business confidence weakened to its lowest since July, reflecting concerns over global conditions, softer tourism demand, and persistent labor shortages.

Japan’s S&P Global Services PMI rose to 53.4 in January 2026 from 51.6 in the previous month, marking the highest reading since July, flash data showed. The latest result also signaled a tenth consecutive month of expansion in services activity, with new orders growing at the fastest pace in four months and overseas demand continuing to strengthen. Also, employment increased at a solid pace, supported by a notable rise in outstanding business at services firms. On the pricing front, cost pressures eased as input price inflation softened, though companies continued to raise their selling prices at a faster rate.

Japan’s S&P Global Services PMI eased to 51.6 in December 2025, below the preliminary estimate of 52.5 and November’s reading of 53.2. While marking the lowest level since May 2025, the latest result pointed to a ninth straight month of increase in services activity. New order growth slowed, despite a modest uptick in foreign orders, which marked the first rise in overseas demand since June. Encouragingly, hiring momentum remained firm, with employment rising at a solid pace and reaching its fastest rate since May 2023. At the same time, outstanding business accumulated at the quickest rate in three months, indicating sustained capacity pressures. On the pricing front, input cost inflation accelerated to its sharpest pace since May and remained well above the long-run average, prompting selling prices to rise at a historically strong rate. Finally, sentiment stayed upbeat, underpinned by expectations of new product launches, store openings, and improving client demand.