Key facts
- Japan's services sector returned to growth in June.
- The Services PMI rose to 52.2 in June.
- The Services PMI was 48.0 in May.
- New business orders increased in June.
- Cost pressures intensified for Japanese service firms in June.
- Output prices increased due to higher input costs.
- Business confidence remained subdued.
- Firms expressed concerns about future economic conditions.
Japan's services sector experienced a return to growth in June, as indicated by the Services Purchasing Managers' Index (PMI) rising to 52.2. This marks a significant improvement from the previous month's reading of 48.0, which had signaled a contraction. The upturn was primarily fueled by a notable increase in new business orders received by service providers. Despite the positive momentum in new business, Japanese service firms encountered intensified cost pressures during June. This led to a corresponding increase in the prices charged for services, reflecting the higher input costs. Business confidence among service sector firms remained subdued, with companies expressing reservations about the outlook for the coming year. This cautious sentiment suggests that while current activity is expanding, underlying concerns about future economic conditions persist.