Japan’s S&P Global Services PMI rose to 53.8 in February 2026, in line with the preliminary estimate and edging up from 53.7 in January, marking the fastest expansion since May 2024. The sector’s growth was underpinned by a solid increase in new orders—the strongest since April 2024—driven primarily by firmer domestic demand and new client acquisitions.
Backlogs of work accumulated at a robust pace, the quickest since June 2023, as firms grappled with rising workloads. Employment continued to grow but slowed to a three-month low amid labor shortages and elevated staff turnover, though it remained above the survey’s long-run average.
Input costs rose sharply, increasing at a historically rapid rate. In response, firms raised their selling prices at the fastest pace since April 2014 to pass higher costs on to customers. Business confidence improved, with firms broadly optimistic about sustained growth over the coming 12 months, supported by strengthening demand and ongoing investment in additional capacity.
