Japan's corporate services inflation accelerates in July

In July, a critical measure of Japan's service-sector inflation surged 3.6 percent year-over-year, according to data released by the Bank of Japan on Wednesday. This uptick reinforced the central bank's belief that a tight labor market is compelling businesses to transfer increasing expenses to consumers by raising service prices.

The rise in the services producer price index, which monitors the pricing among companies for services, followed a revised 3.4 percent gain in June, as reported by the Bank of Japan. The data contributed to indications of expanding inflationary pressures in the economy, which have further supported the argument for an imminent interest rate hike.

Japan's core consumer inflation also accelerated in July from a year earlier as firms absorbed rising import costs due to a weak yen and the ongoing U.S.-Israeli conflict with Iran. Sources have hinted to Reuters that the BOJ is poised to raise interest rates as early as September, potentially increasing the pace beyond the current roughly two times a year.