Japan’s services sector sentiment index rose to 46.4 in August 2026 from 45.7 in the previous month, notching its highest level since February and slightly topping market expectations of 46.3. The latest reading marked the fourth consecutive month of improvement, lifted by stronger sentiment among household-related businesses, even as those in the food and beverage sector declined. Corporate confidence also improved, led mainly by the non-manufacturing sector, while labor market conditions continued to increase. Meanwhile, the economic outlook index, which measures business expectations for the months ahead, climbed to 48.3 from 45.8 in July, hitting a six-month high and rising for a fourth straight month. The improvement suggested businesses expect economic conditions to recover further despite concerns over the impact of natural disasters.