Japan services growth hits five-month high, PMI shows

Japan's services sector experienced its fastest expansion in five months in August, according to a private survey, with the S&P Global final Japan Services Purchasing Managers' Index (PMI) rising to 52.5 from 51.2 in July, indicating growth rather than contraction. New business activity surged for the 26th consecutive month, aided by robust customer demand, although new export business contracted for the fifth month at the sharpest rate since November 2020.

Employment within the sector increased for the 12th consecutive month but at a slower pace, marking the slowest job creation in a year. Despite easing input cost inflation to a four-month low, output charges rose at the second-steepest rate on record, suggesting official inflation could rise further in the coming months, potentially influencing the Bank of Japan's interest rate decision.

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