Japan’s leading indicator of service inflation hits 2.7% in October

[TOKYO] A leading indicator of Japan’s services sector prices rose 2.7 per cent in October from a year earlier, data showed on Wednesday, a sign labour shortages continue to prod companies to pass on rising costs.

The increase in the services producer price index, which tracks the price companies charge each other for services, slowed from a revised 3.1 per cent rise in September, Bank of Japan data showed.

Prices continued to rise for labour-intensive industries such as hotel and construction work, the data showed, underscoring the central bank’s view a tight job market will keep pushing up wages and service-sector inflation.

The BOJ ended a decade-long, massive stimulus programme last year and in January raised short-term interest rates to 0.5 per cent on the view Japan was on the cusp of durably meeting its 2 per cent inflation target.

With consumer inflation exceeding 2 per cent for well over three years, the central bank has signalled its readiness to keep hiking borrowing costs if prices continue to rise steadily accompanied by higher wages. REUTERS