Japan's corporate service prices rise at fastest pace in over 2 years

  • In Business
  • 2022-05-26 01:15:57Z
  • By Reuters

TOKYO (Reuters) - An index measuring prices Japanese firms charge each other for services rose in April at the fastest annual pace in more than two years, data showed on Thursday, a sign that inflationary pressure is building broadly across the economy.

The services producer price index rose 1.7% in April from a year earlier, accelerating from a 1.3% gain in March and marking the fastest annual pace of gain since February 2022, Bank of Japan (BOJ) data showed.

The rise was driven mostly by surging overseas freight costs, but hotel, advertisement and rental fees also increased as more companies in the service industry began passing on their higher costs to customers.

The outlook for service prices will be among key factors the BOJ will scrutinise in deciding how soon it may follow other central banks in raising ultra-low interest rates.

BOJ Governor Haruhiko Kuroda has justified keeping rates low by pointing to Japan's modest wage and service price growth, arguing the recent cost-push inflation will prove temporary unless accompanied by solid domestic demand.

"In Japan, wages have risen, but the rate of increase has remained moderate," Kuroda said in a speech on Wednesday.

"A common challenge for each country is to determine the magnitude and persistence of the inflationary pressure. In doing so, it will be important to capture the relationship between three prices, namely, the price of goods and services, wages, and commodity prices," he said.

(Reporting by Leika Kihara and Kentaro Sugiyama; Editing by Tom Hogue)


More Related News

BOJ focused on wages, yen at June meeting, no debate on tweaking yield cap
BOJ focused on wages, yen at June meeting, no debate on tweaking yield cap

TOKYO (Reuters) -Many Bank of Japan (BOJ) policymakers saw stronger wage growth as key to sustaining the bank's 2% inflation goal, according to a summary of ...

One of World
One of World's Major Wheat Buyers to Trim Imports as Prices Rise

(Bloomberg) -- Most Read from BloombergHyundai Quietly Climbs the EV Sales Charts and Elon Musk NoticesGermany Pushes for G-7 Reversal on Fossil Fuels in...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business