China, Japan, Australia Services Sectors Accelerate

Service sector activity in China, Japan, and Australia accelerated in July, with China posting its fastest growth in over a year and Japan reaching a five-month high, both driven by strong domestic demand and improved new business orders. China's S&P Global Services PMI rose to 52.6, reflecting robust domestic and export demand during the summer travel surge, though the official survey showed only marginal expansion. Japan's services PMI increased to 53.6, fueled by rising domestic orders, but export orders fell sharply amid weak tourism and earthquake concerns. Australia's service sector PMI climbed to 54.1, the highest since March 2024, supported by sharp new business growth, stabilizing exports, and faster job creation despite ongoing inflation pressures. The data underscore diverging trends between domestic and export markets and highlight that service sectors are currently outperforming manufacturing in these economies. Analysts remain cautious about global economic risks, including weakening export momentum in China and persistent labor constraints in Japan.