FX.co ★ Japan Services PMI Revised Downward

Japan's S&P Global Services PMI dipped to 51.6 in December 2025, falling short of the preliminary forecast of 52.5 and down from November's figure of 53.2. Despite being the lowest level since May 2025, this result still indicates a ninth consecutive month of growth in the services sector. The expansion in new orders decelerated, although there was a slight increase in foreign orders, marking the first rise in overseas demand since June. On a positive note, the labor market remained robust, with employment growing at a brisk pace, registering the fastest increase since May 2023. Simultaneously, the backlog of work accumulated at the quickest rate in three months, highlighting ongoing capacity challenges. On the pricing side, input cost inflation surged to its highest rate since May, significantly above the long-term average, leading to a historically strong increase in selling prices. Looking ahead, confidence in the sector remains strong, bolstered by the anticipation of new product launches, store openings, and improving client demand.