Japan's Service Sector Activities Expanded In April, U.S.-Japan Trade Talks Stalled

Akira Ito
07 May, 2025
Tokyo

 Japan's stock market indexes struggled to advance in Tuesday's trading, and investors awaited rate decisions from major central banks. 

Investors stayed on the sidelines after returning from long weekend, following the lack of progress on trade talks with the U.S. 

The Nikkei index traded in a tight range, and the broader Topix index trimmed gains of the session as investors dialed down expectations of rate cuts in the U.S. 

The U.S. Federal Reserve is widely anticipated to hold rates steady later today and maintain its federal funds rate range between 4.25% and 4.50%. 

Investors are awaiting comments from the central bank policymakers and are looking for insights about the impact of U.S. tariffs on inflation and economic growth outlook. 

The Bank of England is widely anticipated to cut its bank rate by 25 basis points to 4.25%, reflecting weakening inflation and a deteriorating economic outlook.  

 

Japan's Service Sector Expanded in April

Closer to home, Japan's services sector growth accelerated in April after stagnating in March, according to a report released by S&P Global. 

The au Jibun Services PMI increased to 52.4 in April from 50.0 in March, as cost pressures intensified, with average input prices rising  at the fastest pace in over two years. 

The headline figure is the Services Business Activity Index, which tracks changes in the volume of business activity compared with one month previously. 

A reading above 50.0 indicates an overall increase compared to the previous month, and below 50.0 an overall decrease.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average edged down 0.1% to 36,779.66, and the Topix index added 0.3% to 2,696.16. 

Stocks in heavy industries and automobile sectors declined amid a lack of progress on trade talks with the U.S. 

Kawasaki Heavy Industries declined 1.4% to ¥8,311.0, IHI Corp rose 0.9% to ¥11,320.0, and Mitsubishi Heavy Industries advanced 1.9% to ¥2,844.50. 

Toyota Motor Corp. declined 2.5% to ¥2,706.0, Honda Motor decreased 1.9% to ¥1,458.0, and Nissan Motor eased 2.4% to ¥338.10. 

Shipping companies traded volatile as investors worried that the erratic U.S. trade policy may dampen shipping volume to the U.S. 

Shipping companies are signaling a sharp decline in shipping volumes from China and Asia to the U.S. ports on the West Coast. 

Nippon Yusen advanced 0.4% to ¥4,679.0, Mitsui O.S.K. Lines Ltd. added 1.7% to ¥4,675.0, and Kawasaki Kisen Kaisha decreased 0.2% to ¥1,946.0.