That's up from 51.6 in December and beat last month's flash estimate of 53.4. It also moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Japanese services companies signaled an increase in business activity for the tenth month in a row in January. Furthermore, the respective seasonally adjusted index climbed from 51.6 in December to 53.7, to signal a solid rate of growth that was the most pronounced since last February. Underlying data split by sub-industry suggested that Finance & Insurance firms continued to lead the upturn, while the softest rise in activity was seen across the Information & Communication segment.

The survey also showed that the composite index jumped to 53.1 - up from 51.1 in December and from 52.8 in the estimate.

The improvement was driven not only by a stronger rise in services activity, but a fresh increase in factory production. At the composite level, new orders rose at the quickest rate since May 2024, which was supported by a broad-based increase in demand for both goods and services.

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