Japan’s services sector sentiment index edged up to 44.0 in June 2026 from 43.6 in the previous month, marking its highest level since February and pointing to a continued improvement in business confidence. While sentiment among household-related businesses remained subdued, stronger conditions in the broader services sector helped lift the overall index. Corporate confidence also improved, driven mainly by strength in the non-manufacturing sector, with labor market conditions continuing to firm. Looking ahead, the economic outlook index, which measures expectations for the months ahead, jumped to 45.7 from 40.7 in May, the highest reading in four months. The sharp increase suggests businesses expect economic conditions to stabilize as concerns over the impact of the Middle East conflict eased.