Japan’s S&P Global Services PMI Business Activity Index rose to 52.5 in August 2026, up from a flash estimate of 52.3 and 51.2 in July. This was the fastest pace of expansion since March. New orders increased more quickly after hitting a 25‑month low in July, with growth running slightly above the 2026 average, driven mainly by stronger domestic demand. In contrast, export demand continued to decline.
Employment growth slowed to its weakest rate in a year and remained only marginal. Outstanding business rose slightly, with the pace of accumulation little changed from July’s 17‑month low.
Input costs continued to climb sharply, though the rate of increase eased somewhat amid ongoing cost pressures. Selling-price inflation accelerated to its second-fastest pace since the survey began in late 2007, exceeded only in April 2014 following the national consumption tax increase.
Business confidence improved modestly, supported by planned expansion, expected efficiency gains from AI adoption, and projections of stronger customer demand.
