FX.co ★ Japan Services Sector Returns to Growth in June

Japan’s S&P Global Flash Services PMI Business Activity Index rose to 51.8 in June 2026 from 50.0 in May, according to preliminary estimates. The latest reading indicates a return to expansion in the services sector after activity stagnated in the previous month, supported by stronger demand conditions and a more robust increase in new business.

Rising workloads contributed to a further buildup of backlogs, prompting firms to expand their workforces. However, while domestic demand improved, external demand remained weak, with service providers continuing to report a pronounced decline in export business.

Cost pressures stayed elevated, leading many firms to pass higher input expenses on to clients through additional price increases. Looking ahead, business confidence eased, as companies pointed to ongoing concerns about inflation, persistent labor shortages, and supply-chain disruptions related to the conflict in the Middle East.