April PMI data shows input inflation at a 42-month high, pressuring business confidence and export demand amid geopolitical tensions.
Japan’s services sector expanded at its weakest pace in 11 months in April, with the PMI dropping to 51.0 from 53.4 in March. The slowdown was driven by surging input costs, which hit a 42-month high, fueled by Middle East conflict-related fuel price spikes.
The decline marks the 13th consecutive month of growth but reflects mounting pressure on businesses. New orders grew at the slowest rate since October, while export demand contracted for the first time in five months. Manufacturing output accelerated, partially offsetting services weakness, but composite PMI still fell to 52.2.
Business confidence remained near post-pandemic lows, with selling prices rising at a record pace, signaling potential inflation acceleration ahead. The data underscores persistent uncertainty weighing on economic activity.