S&P Global Services PMI

What is au Jibun Bank Japan Services PMI?

The au Jibun Bank Japan Services PMI measures month-on-month direction in Japanese services activity. S&P Global compiles it monthly since September 2007 as part of a survey programme covering over 40 countries. It is sponsored by au Jibun Bank, an internet retail bank established by KDDI and MUFG Bank.

The panel holds around 400 firms across consumer excluding retail, transport, information, communication, finance, insurance, real estate and business services. It is stratified by sector and workforce size, based on contributions to GDP. It tracks breadth of change, the share growing versus shrinking, in services activity only, not manufacturing output, retail sales or GDP (Gross Domestic Product) levels.

When is it released and what happens each release?

Responses are usually collected in the second half of each month, and results appear in two releases per cycle. Flash, the earliest signal of private sector conditions using about 85% to 90% of replies, arrives about one week before the final.

The final follows early in the month after the reference month with a 09:30 JST embargo. It brings the Composite gauge, seven sub-indices and an economist comment. Survey data are not revised after publication, though seasonal adjustment factors may be, and scores show direction versus the prior month, not output size.

What moves au Jibun Bank Japan Services PMI?

The au Jibun Bank Japan Services PMI headline has no preset weights, so the six related demand, capacity and price gauges below add context.

• New Business: inflows of demand driving activity.
• New Export Orders: foreign demand including inbound tourism.
• Outstanding Business: work in hand not yet completed, a near-term activity signal.
• Employment: staffing response to capacity pressure.
• Input Prices and Prices Charged: operating costs such as staff and materials, plus selling-price inflation passed to buyers.
• Business Expectations: company sentiment on activity over the coming 12 months.

In the May 2023 survey, published June 5, 2023, the Business Activity Index rose from 55.4 in April to 55.9, a fresh series record. New business, new export orders and backlogs also hit records on strong foreign demand and inbound tourism. Hiring grew at its second-fastest pace behind April 2019, with confidence near the series peak.

Flash had read 56.3, so the 55.9 final showed sample completion converging without changing the record story. Input cost growth eased to a 14-month low while selling prices rose for a 13th straight month. Manufacturing only just returned to expansion, yet the Composite reached 54.3, the second-strongest reading since September 2007.

How is au Jibun Bank Japan Services PMI calculated?

1. Replies: Collect higher, unchanged or lower answers versus the prior month in the second half of each month.
2. Diffusion formula: For each variable, score H plus half U, where H is the % reporting higher and U is the % reporting unchanged. For example, 30% higher with 50% unchanged gives 55.0, a growth signal. With 20% higher and 55% unchanged, the score is 47.5, a decline signal.
3. Seasonal adjustment: Adjust indices for regular seasonal effects, then read above 50 as growth and below 50 as decline.
4. Headline and Composite: Take the services headline as the single activity index with no weighting, averaged with manufacturing output by GDP shares for the Composite.

Key point: The Services PMI is not a weighted basket like Manufacturing PMI; it compares with Manufacturing Output and tracks monthly direction, not level.