Japan services growth slows in July as selling-price inflation hits 12-year high

Japan's services sector expanded at a slower pace in July, according to a private-sector Purchasing Managers' Index (PMI) released by S&P Global.

The deceleration was driven by weakening demand and mounting cost pressures, which simultaneously pushed selling-price inflation to its highest level since April 2014.

The data presents a mixed picture for the Bank of Japan.

While the sector remains in expansion territory, the slowing momentum suggests that domestic demand is softening.

At the same time, the surge in selling prices indicates that firms are passing on rising input costs to consumers, keeping inflationary pressures firmly in focus for policymakers.

This development follows a rebound in June, when the services sector bounced back into expansion after a stall in activity the previous month.