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)

COMMENTS

More Related News

Commodity Losses Strip Emerging Markets of Their Lone Attraction
Commodity Losses Strip Emerging Markets of Their Lone Attraction

(Bloomberg) -- The most popular trade in emerging markets this year -- betting on commodity-exporting nations -- is losing its appeal.Most Read from...

Stocks up as commodity slide offers a salve for inflation fears
Stocks up as commodity slide offers a salve for inflation fears

Stocks and bonds were both headed for their first weekly gain in a month on Friday as investors wagered on central banks bringing inflation to heel, though...

Govt panel member says BOJ
Govt panel member says BOJ's yield cap causing 'negative spiral' of yen falls

The Bank of Japan's resolve to keep borrowing costs ultra-low is causing a "negative spiral" of yen weakness that highlights the need to tweak its yield cap ...

Asia shares struggle, oil falls as recession fears linger
Asia shares struggle, oil falls as recession fears linger

Asian shares wobbled while commodity prices fell on Thursday as mounting worries about the risks of a global recession amid aggressive rate hikes by the...

Leave a Comment

Your email address will not be published.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

Cancel reply

Comments

Top News: Business