Japan’s private sector posted modest gains in June, with the final PMI Services index rising to 51.7 from 51.0 and the Composite index improving to 51.5 from 50.2 in May. The latest data signalled continued expansion, though momentum softened compared to the first quarter. S&P Global’s Annabel Fiddes noted that second-quarter PMI readings suggest a slowdown in GDP growth.
“Demand conditions remained sluggish” as new business rose only fractionally for the second month, and new export orders continued to decline. Firms are still struggling to gain traction amid US tariff uncertainty.
Meanwhile, inflationary pressures persisted. Businesses reported “strong cost pressures”, partly due to rising staffing levels. These costs were passed on through quicker hikes in output prices, despite muted demand.
