Japan Services Prices Rise at Fastest Pace Since June 2024

Japan’s services producer price index rose 3.7% year over year in August, up from 3.6% in July and its fastest annual increase since June 2024. Higher freight, advertising and rental lease fees contributed to the rise, pointing to broader service-sector price pressures and offering the Bank of Japan a measure of how companies are passing on labor costs. The data reinforces expectations that the BOJ may raise interest rates further after lifting its benchmark rate to 1.25% this month, with Governor Kazuo Ueda signaling further increases could be needed to keep inflation from exceeding the bank’s target.