Japan’s service sector maintained steady momentum in February, with the final PMI Services reading edging up to 53.8 from January’s 53.7. The figure marks the strongest level since May 2024 and signals continued expansion in business activity, supported by improving demand conditions.
The broader picture for the economy also strengthened. PMI Composite rose to 53.9 from 53.1, pointing to the fastest pace of private sector expansion in nearly three years.
According to Annabel Fiddes of S&P Global Market Intelligence, the services sector recorded its quickest rise in sales in almost two years, while manufacturing performance also remained robust.
At the same time, cost pressures intensified across the private sector. Input costs climbed at a historically sharp pace, but improving demand allowed businesses to pass those increases on to customers. Selling prices rose at the fastest rate in nearly twelve years, suggesting firms are regaining pricing power while inflationary pressures remain elevated.
