Japan Services PMI Revised Upward

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.