FX.co ★ Japan Services Sector Growth Eases

In May 2025, the au Jibun Bank Japan Services PMI declined to 50.8, down from a final figure of 52.4 in the previous month, according to preliminary data. This outcome indicates a continued expansion in the services sector, albeit at a slower pace, due to waning client demand. New orders experienced a slowdown, marking the slowest growth in 11 months, while new export orders registered only a slight uptick. Concurrently, employment growth hit a 17-month low and the accumulation of work backlogs decelerated, marking the slowest rate in three months. On the inflation front, both input costs and selling prices increased, though at more moderate yet significantly high levels. Furthermore, business confidence regarding the 12-month outlook reached its lowest point since January 2021, highlighting rising uncertainties about future demand.