The S&P Global Japan Services PMI came in at 53.1 in October 2025, above the flash estimate of 52.4 but slightly below September’s 53.3, signaling a continued expansion in the services sector. New orders rose at the slowest pace in 16 months, while foreign demand declined further, though the rate of contraction eased to a four-month low. Employment growth also softened, with staffing levels rising only marginally, primarily due to business expansion plans and filling vacancies. Capacity pressures eased, reflected in a modest rise in backlogs, the weakest in four months. On the cost front, input prices increased sharply, marking the fastest rise since May, driven by higher labor, raw material, food, and fuel costs. In turn, firms raised selling prices at the steepest pace since June. Finally, business confidence remained positive, though optimism moderated from September’s eight-month high.
