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Japan services PMI slows to 51.2 as inflation pressures persist
The Japan Composite PMI held near 52.7, while firms reported rising input and output prices that could keep pressure on the Bank of Japan to normalize policy.
Japan’s services sector continued to expand in July, but growth cooled, with the S&P Global Japan Services PMI easing to 51.2 from 52.2 in June.
The survey pointed to softer underlying demand, even as businesses cited events, promotional campaigns, and new contract wins for activity. Overall private sector momentum remained solid, with the Japan Composite PMI edging down to 52.7 from 52.8.
S&P Global said moderation in services was largely offset by manufacturing, where output recorded its strongest increase since early 2014, keeping the composite gauge in expansion territory.
Inflation was a key theme in the report, with companies describing rapid input cost increases and higher selling prices, and output price inflation at its second-fastest pace in nearly two decades. The findings add to the view that the Bank of Japan may face continued pressure to normalize monetary policy even as services growth slows.