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Japan PMI May 2024

Japan: Services PMI falls in May

The au Jibun Japan Services Purchasing Managers’ Index (PMI) fell to 53.8 in May from 54.3 in April. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in services-sector business activity compared to the previous month.

The key drivers behind the latest PMI reading included a prolonged and robust upturn in business activity aided by new business inflows—although growth eased from April. The sectors showing the strongest growth were ICT and financial insurance, supported by a series-record increase in services exports linked to tourism and the weak yen. Moreover, employment at service providers continued to rise solidly.

Charge inflation cooled from April’s ten-year high but remained the third-strongest on record, despite a slight easing in input price inflation from the previous month’s eight-month high. Finally, business sentiment improved, with confidence among service providers linked to higher wages driving consumer spending, new products and services, a global economic recovery, and the weak yen. This optimism was among the highest recorded to date.

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