Japan's Services Sector Rebounds in June Amid Rising Cost Pressures, S&P Global Survey Shows

Japan's services sector returned to growth in June after stalling in the previous month, according to data released by S&P Global on Friday. The latest reading, which gauges services activity, rose to 52.2 in June from 50.0 in May, signaling a renewed expansion in business activity after activity stalled the previous month. The broader Japan Composite Output Index, which combines manufacturing and services activity, increased to 52.8 from 51.1, marking the fastest expansion in overall private sector output in three months. The upturn was supported by a solid increase in new orders, with firms citing stronger domestic demand, new product launches, and upcoming events. Export business, however, declined further as weaker overseas demand and lower tourist arrivals weighed on sales. Input cost inflation accelerated to its fastest pace in four years, driven by higher oil, energy, food, and labor costs. Although firms continued to pass on higher expenses to customers, the pace of selling price inflation eased from May's near-record high. Service providers continued to add staff in June as they sought to expand capacity and fill vacancies. Although hiring picked up from May, the.