Key facts
- Japan's services sector returned to expansion in June, with the S&P Global final Services PMI rising to 52.2.
- New business in Japan increased significantly, though new export business continued to decline.
- Input prices for Japanese services rose at the fastest pace since June 2022, driven by oil, energy, food, and wages.
- Prices charged to customers eased from May's near-record high.
- Japan's Composite PMI rose to 52.8 in June, indicating the strongest expansion in three months.
Japan's services sector returned to growth in June, with the S&P Global final Services Purchasing Managers' Index (PMI) rising to 52.2 from 50.0 in May. This marks the 14th expansion in the past 15 months, though the pace was modest. New business increased at one of the quickest rates seen in two years, driven by stronger demand in the transport sector, despite a continued decline in new export business. Cost pressures intensified, with input prices rising at the fastest pace since June 2022 due to higher oil, energy, food, and wage costs. However, prices charged to customers eased from recent highs. Employment growth remained modest, and overall business confidence strengthened only slightly amid concerns over Middle East tensions and rising expenses. The Composite PMI, which includes manufacturing and services, rose to 52.8 in June from 51.1 in May, indicating the strongest expansion in three months.