FX.co ★ Japan Services Growth Revised Downward

Japan’s S&P Global Services PMI Business Activity Index registered 51.3 in September 2026, down from a flash estimate of 51.6 and August’s 52.5. The latest reading came in below the year-to-date average, as growth in new orders slowed, in part due to disruptions caused by the Kumamoto earthquake, while export orders continued to contract sharply.

Employment rose at its fastest pace since February, driven by stronger customer demand and efforts to expand capacity. However, backlogs of work increased at the quickest rate in seven months, indicating growing capacity pressures.

Input costs remained elevated, though the rate of inflation eased to a six-month low. Firms reported higher expenses for raw materials, labor, oil, and food. In response, service providers raised selling prices at one of the steepest rates on record.

Meanwhile, business confidence strengthened to its highest level since June, underpinned by expectations of firmer demand, new product offerings, greater diversification, and further capacity investment.