The Jibun Bank Services PMI will likely impact buyer demand for the Japanese Yen. Following the Spring wage hikes, the BoJ hopes the services sector can fuel demand-driven inflation and allow for a higher interest rate environment. Furthermore, the services sector contributes over 60% to the Japanese economy.

However, investors must consider the sub-components, including input prices, employment, and new orders.

Beyond the numbers, investors should monitor for Bank of Japan commentary. Views on inflation, the economic outlook, and the timing for an interest rate hike could move the dial. Yen weakness continues to leave the BoJ under pressure to fuel expectations of a summer rate hike.

US Economic Calendar: The Services Sector, the Labor Market, and the Fed

Later in the Thursday session, US jobless claims data and preliminary private sector PMIs warrant investor attention.

Economists forecast initial jobless claims to fall from 222k to 220k in the week ending May 18. Tighter labor market conditions could support wage growth and increase disposable income. Upward trends in disposable income may fuel consumer spending and demand-driven inflation. Moreover, tighter labor market conditions could leave a Fed interest rate hike on the table.

However, the S&P Global Services PMI could impact the Fed rate path more. The services sector contributes over 70% to the US economy, with housing services inflation a focal point.