Japan’s S&P Global Services PMI Business Activity Index stood at 51.3 in September 2026, down from a flash reading of 51.6 and August’s 52.5. The latest result was below the average in 2026 so far, as new orders rose at a softer pace, partly reflecting disruptions from the Kumamoto earthquake, while export orders continued to fall sharply. Employment growth accelerated to its fastest since February, helped by rising customer demand and efforts to expand capacity. However, backlogs of work increased at the fastest rate in seven months, pointing to mounting capacity pressures. Input costs continued to rise sharply, although the pace of inflation eased to a six-month low, with higher raw material, labor, oil and food costs cited. Firms raised selling prices at one of the sharpest rates on record. Meanwhile, business confidence improved to its highest level since June, supported by expectations of stronger demand, new products, diversification and capacity investment.