The Jibun Bank Japan Services PMI was revised higher to 51.0 in May 2025 from 50.8 in the preliminary estimates. However, the latest result remained below 52.4 in April, signaling a second consecutive expansion in services activity, though the pace of growth slowed amid weakening client demand and uncertainty over the future trade environment due to rising US tariffs. New orders rose at a softer pace, while foreign sales expanded at the weakest rate in five months. Meanwhile, employment growth eased to a 17-month low, and backlogs of work accumulated at the slowest rate in three months. On the inflation front, input cost inflation eased from April’s 26-month high but remained historically elevated overall. As a result, service providers raised their average output charges again - and at a solid pace. Finally, business sentiment declined to its lowest level in over four years, due to concerns over global economic conditions, rising costs, staff shortages, and an aging population.