FX.co ★ Japan Services PMI Revised Lower

Japan’s S&P Global Services PMI Business Activity Index was revised down to 51.2 in July 2026 from a preliminary estimate of 51.9 and a final reading of 52.2 in June. This marked the second consecutive month of expansion in the services sector, but the pace of growth slowed as new business rose at its weakest rate in 25 months.

Employment continued to increase, though more modestly, in line with signs of easing capacity pressures. Backlogs of work edged higher only fractionally, registering the smallest increase in 17 months. Foreign demand fell for the fourth consecutive month, but the rate of decline eased to its slowest since April.

On the cost side, input price inflation accelerated to near June’s four-year high. In response, firms raised output charges at the second-fastest pace on record, as they continued to pass higher costs on to customers. Looking ahead, business sentiment remained positive, but stood among the weakest levels seen since the pandemic.