Japan Services Sentiment Hits 7-Month Peak

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Japan’s service sector index rose to 46.7 in August 2025 from 45.2 in the previous month, marking the highest since January and the fourth straight monthly increase and beating market forecasts of 45.7. The household budget trend index improved, driven by gains in the food and beverage industry despite weaker housing-related activity. The corporate trend index also advanced on strength in the non-manufacturing sector, though employment continued to decline. Meanwhile, the economic outlook index edged up to a seven-month high of 47.5 from 47.3, reflecting optimism for continued recovery despite persistent inflation pressures and uncertainty linked to U.S. trade policy.

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