Japan services sector expands at fastest pace in five months in August, PMI shows

Japan's services sector expanded at its fastest pace in five months in August, with the S&P Global final Japan Services Purchasing Managers' Index (PMI) rising to 52.5 from 51.2 in July. This growth was driven by stronger domestic demand, boosting business activity and new work. While new export business contracted for a fifth consecutive month, input cost inflation, though eased, remained high, leading firms to pass costs to clients. This sustained cost pressure suggests official inflation could rise further, strengthening the case for another Bank of Japan interest rate hike.