Japan's services sector expanded modestly in October for the fifth consecutive month, with business activity and new orders growing slightly faster. According to Sina Finance, the final S&P Japan Services PMI rose to 51.7 from 51.3 in September, below the preliminary reading of 52.0; readings above 50 indicate expansion.

New orders rose for a 28th consecutive month, with growth accelerating from September, supported by stronger domestic demand, new customers and business expansion initiatives. Overseas demand remained weak, although new export orders fell at the slowest pace since April.

Cost pressures eased further: input-price inflation slowed for a fourth month to an eight-month low, while output-price inflation narrowed. Prices charged by businesses nevertheless continued to rise monthly for four and a half years. Business confidence fell to its lowest level since March, amid concerns about inflation, an aging population and labor shortages.

Annabel Fiddes, associate director of economics at S&P Global Market Intelligence, said persistent inflation could weigh on demand and hiring in the coming months. She added that the Bank of Japan would focus on whether growth momentum weakened further and cost pressures eased when assessing whether to tighten policy further.

Employment in the services sector grew only slightly in October, the slowest pace in 14 months. Businesses cited expansion plans as a reason for hiring, while resignations and retirements constrained overall headcount growth.