FX.co ★ Japan Services Sector Shrinks After 4 Months of Growth

The Au Jibun Bank Japan Services PMI declined to 49.5 in March 2025 from 53.7 in February, which had been the highest level in six months, according to a preliminary report. This latest figure indicates the first decline in service sector activity since last October and represents the most significant decrease in nine months. There was a notable slowdown in the growth of new orders, foreign sales, and employment, alongside an increase in unfinished workloads, marking its first such rise this year. Inflationary pressures intensified, as input costs surged at their fastest pace in over two years, leading to a considerable increase in the prices charged. Additionally, business sentiment hit a 50-month low, burdened by worries over rising costs, labor shortages, and subdued forecasts for customer demand.