Japan’s service sector index edged down to 47.6 in January 2026 from a downwardly revised 47.7 in the previous month, falling short of market expectations of 49.1 and marking the lowest reading since August. Household sentiment in the service sector weakened, even as conditions in the retail segment showed some improvement. Meanwhile, the corporate trend index rose, mainly supported by gains in the non-manufacturing sector, although employment conditions deteriorated. Separately, the economic outlook index climbed to 50.1 from a downwardly revised 45.5 in December, signaling expectations of an economic recovery despite lingering concerns over the impact of rising prices.

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