FX.co ★ Japan Services PMI Revised Upward

The au Jibun Bank Japan Services PMI for May 2025 has been adjusted upwards to 51.0 from the initial estimate of 50.8. Despite this revision, the figure is still lower than April's 52.4, indicating continued, albeit slower, expansion in the services sector. This deceleration is largely attributed to waning client demand and uncertainties regarding trade policy, particularly with the increasing US tariffs. While there was a rise in new orders, the growth rate was more subdued, and international sales experienced their weakest increase in five months. Employment growth likewise decelerated, marking a 17-month low, and the rate of work backlog accumulation was the slowest observed in three months. In terms of inflation, the rise in input costs diminished compared to April's 26-month peak, despite pressures from elevated energy, labor, and transportation expenses. Consequently, service providers continued to raise their average output charges at a robust rate. Additionally, business confidence has dropped to its lowest since January 2021, influenced by concerns over global economic trends, escalating costs, labor shortages, and demographic challenges.