AI Data Insight
The final reading of Japan's Services PMI for Q3 2026 (July) fell to 51.2, lower than the previous reading of 52.2, indicating that while the services sector continues to expand, momentum has slowed significantly. Sub-indices show that the growth rate of new orders hit a 25-month low, but companies' efforts to pass on costs remained strong, with the increase in terminal selling prices reaching its second-highest level in nearly 20 years. Looking ahead, high operating costs and potential interest rate hikes by the Bank of Japan will be two key factors affecting the recovery of domestic demand in the second half of the year.