Japan: Services PMI falls in June
The au Jibun Japan Services Purchasing Managers’ Index (PMI) fell to 49.4 in June from 53.8 in May. As a result, the index moved below the 50.0 no-change threshold, and signaled a deterioration in services-sector business activity compared to the previous month.
The driver of the decline was a stagnation in new business, which had previously expanded for 21 consecutive months. Domestic demand contracted, although international sales saw a rise—helped by the weak yen—albeit at a slower pace compared to May’s record high. This stagnation in new business led to a reduction in outstanding work for the first time since October 2023. Despite this, service providers continued to add workers, reflecting positive forecasts for business activity growth over the next 12 months, albeit with a degree of optimism that has eased to an eight-month low.
On the topic of prices, input price inflation accelerated to a ten-month high, significantly above the long-run survey average; nonetheless, the rate at which prices charged for services increased was the weakest since November 2023.