Archive · 3 Sep 2026
Japan Services Growth Hits Five-Month High on Domestic Demand
Japan’s services businesses grew faster in August.
Their PMI score rose to 52.5, which is above 50 and signals growth.
People and companies in Japan placed more orders for services.
New business has now increased for 26 months in a row.
However, demand from customers outside Japan became weaker.
Services companies also hired more workers, but hiring slowed.
Businesses still faced high costs and raised their prices.
These stronger growth and price pressures could support another Bank of Japan interest-rate increase.
Japan’s final services PMI rose to 52.5 in August from 51.2 in July.
Domestic demand strengthened, lifting new business growth for the 26th consecutive month.
New export business contracted for a fifth straight month, its sharpest decline since November 2020.
Services employment increased for the 12th consecutive month, though hiring growth slowed to a one-year low.
The Composite PMI climbed to 53.5, while persistent cost pressures supported expectations of another Bank of Japan rate hike.
- Who
- Japan’s services businesses, surveyed by S&P Global Market Intelligence, and the Bank of Japan.
- What
- Services-sector activity accelerated in August, with the final PMI rising to 52.5.
- When
- August; the survey compares results with July.
- Where
- Japan.
- Why
- Stronger domestic demand increased new business, while elevated cost pressures continued to affect prices and monetary-policy expectations.
- August services PMI
- 52.5
- July services PMI
- 51.2
- New business trend
- Increased for the 26th consecutive month
- Export demand
- Contracted for a fifth consecutive month
- Services employment
- Increased for the 12th consecutive month
- Composite PMI
- Rose to 53.5 from 52.7 in July
- Output charges
- Reached their second-highest rate on record