Japan's corporate services inflation accelerates in July
TOKYO: A key gauge of Japan’s service-sector inflation rose 3.6 per cent in July from a year earlier, data showed on Wednesday, reinforcing the central bank’s view that a tight labour market is pushing firms to pass rising costs on to consumers.
TOKYO: Japan's corporate services inflation accelerated significantly in July, according to data released on Wednesday, igniting concerns of a potential near-term interest rate hike by the Bank of Japan. The key indicator, known as the services producer price index, rose by 3.6 percent year-on-year, reinforcing the central bank's belief that a tight labor market is compelling businesses to transfer escalating costs to consumers.
This figure marked a significant jump from the previously reported 3.4 percent gain in June, as reported by the Bank of Japan. The burgeoning inflationary pressures in the economy have further strengthened the argument for an imminent interest rate increase. Additionally, core consumer inflation in Japan also ticked up in July compared to a year ago, as firms passed along the increased import costs stemming from a weaker yen and the ongoing conflict between the US and Iran.
Despite these signs, the Bank of Japan is reportedly gearing up for a rate hike in September and is considering more aggressive hikes in the future, currently at roughly two times a year.
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- Japan's corporate services inflation accelerates in July channelnewsasia.com
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