Japan’s S&P Global Composite PMI stood at 51.1 in May 2026, matching flash data and marking the 14th straight month of expansion in private sector activity. However, the latest reading eased from 52.2 in April and pointed to the weakest growth since December, as overall activity was supported solely by stronger manufacturing output while the services sector stagnated. New business continued to rise but at the slowest pace in five months, reflecting only modest demand growth. External demand also softened, with overseas orders for Japanese goods and services increasing at the weakest rate so far this year. Employment growth slowed to a seven-month low, contributing to a faster accumulation of backlogged work. At the same time, cost pressures intensified, with input prices rising at the sharpest pace in 43 months. Firms responded by raising selling prices more aggressively, pushing output charge inflation to a new survey record.