FX.co ★ Japan Services PMI Revised Upward

Japan’s S&P Global Services PMI rose to 53.4 in March 2026, beating both the flash estimate of 53.0 and market expectations of 52.8, though edging down from February’s 21‑month high of 53.8. The latest reading pointed to a continued expansion in the services sector, with new business increasing for the 21st consecutive month, albeit at a slower pace.

Export demand strengthened, as new export orders grew at one of the fastest rates in the past ten months, though overall growth remained modest. Firms kept adding staff to expand capacity, but the pace of job creation eased to its weakest level since October. Backlogs of work ticked up slightly, running counter to the longer-term pattern of declining outstanding business.

Input cost inflation accelerated to its highest level in nearly a year, reflecting rising prices for raw materials, energy, and fuel, partly linked to tensions in the Middle East. Although output price inflation moderated from February, it remained elevated. Meanwhile, business confidence deteriorated, sliding to its lowest point since the pandemic amid mounting geopolitical uncertainty.