Japan's Services Growth Slows Amid Intense Cost Pressures

Japan's services sector growth slowed in July as demand weakened and firms faced intense cost pressures. The S&P Global Japan Services Purchasing Managers' Index (PMI) fell to 51.2, down from 52.2 in June.

New business growth hit its lowest level in two years, while foreign demand for Japanese services declined for the fourth straight month.

Cost pressures remained high, with input prices rising at a rate just below June's four-year high. Respondents cited strong inflation linked to the war in the Middle East, higher staff costs, and a weak yen as key drivers.

Service providers raised their selling prices at the fastest pace since April 2014, when a consumption tax hike stimulated broad-based retail price increases.