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S&P Global's final Japan Services PMI climbed to 52.5 in August, a five-month high, with input and output price gauges near record levels as firms pass costs on to customers. That mix of firmer domestic demand and accelerating service inflation tightens the BOJ normalisation path, a USD/JPY-negative signal that also lifts short-end JGB yields and pressures the carry trade financing risk assets, following hawkish comments from board member Takata and Ueda's refusal to push back on September hike pricing. The offset is external: new export business shrank at its fastest pace since November 2020, so watch whether BOJ commentary treats weak overseas demand and Middle East supply disruption as reasons to delay, which would re-soften the yen.
As a Macro signal, watch whether it changes price action, volatility, or flows around JPY=X.
Original Source: InvestingLive News
This page is market information analysis, not investment advice.
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