Japan’s S&P Global Services PMI edged down to 50.0 in May 2026 from a final 51.0 in the previous month, flash estimates showed. The reading marked the weakest level since March 2025 and signaled a stagnation in services activity for the first time in more than a year, as softer demand weighed on the sector. Growth in new business eased notably, while overseas demand contracted amid lingering global uncertainty and supply-chain disruptions linked to the Middle East conflict. Outstanding business volumes continued to rise, though the pace of backlog accumulation remained softer than in the manufacturing sector. On the inflation front, firms continued to face strong cost pressures, although the burden was reported to be more severe among manufacturers than service providers. Higher operating expenses, nevertheless, prompted service firms to raise selling prices further in an effort to protect margins.