Japan Services Growth Slows After Quake Disruption

Japan's S&P Global Services PMI fell to 51.3 in September from 52.5 in August on Monday, missing the 51.6 forecast but staying above 50, the expansion threshold. "PMI survey data pointed to a softer expansion of Japan's service sector as the third quarter drew to a close, with businesses signalling slower increases in business activity and new orders," said Annabel Fiddes at S&P Global. New orders rose a 27th month at a slower pace. New export business fell at the second-sharpest rate since January 2021. Firms cited Kumamoto earthquake disruption and softer demand; domestic demand still supported sales. Employment rose a 13th month, fastest since February, with the strongest backlog buildup in seven months. Input-cost inflation eased to a six-month low but stayed elevated; output prices rose more softly. Confidence hit its highest since June. The Composite Output Index fell to 52.3 from 53.5 for an 18th month of gains. BigGo calls the composite weakest in four months; tradersunion says since May. Thursday's Bank of Japan tankan showed manufacturers' confidence at an eight-year high while non-manufacturer sentiment soured. S&P Global said growth and inflation could support a rate hike as soon as October.