Japan Services Growth Cools as Cost Pressures Test Demand

Tokyo, 5 October 2026 – Japan’s service sector remained in expansion during September, but a slower pace of activity and weaker overseas demand showed that domestic resilience is being tested by high costs, disruption and a more demanding interest-rate environment.

The final services purchasing managers’ index eased to 51.3 from a five-month high of 52.5 in August and came in below the preliminary estimate of 51.6. A reading above 50 signals expansion, so the sector continued to grow, but the loss of momentum was clearer than first indicated. The broader composite index, covering manufacturing and services, fell to 52.3 from 53.5, its weakest since May.