Japan's corporate service inflation perks up in February
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FILE PHOTO: A man uses a laptop on a street at a business district in Tokyo, Japan January 23, 2024. REUTERS/Kim Kyung-Hoon/File Photo
TOKYO, March 26 (Reuters) - A key gauge of Japan's service-sector inflation rose 2.7% in February from a year earlier, data showed on Thursday, reinforcing the central bank's view that a tight labour market is pushing firms to pass rising costs on to consumers.
The Bank of Japan has stressed the need to see inflation durably hit its 2% target driven by rising wages and services prices, rather than higher raw material costs, to proceed with further interest rate hikes.
The increase in the services producer price index, which tracks the price companies charge each other for services, followed a 2.6% gain in January, BOJ data showed.
Prices rose for labour-intensive industries such as hotel and construction work, the data showed, a sign labour shortages were pushing up wages and service-sector inflation.
The BOJ ended a decade-long, massive stimulus programme in 2024 and in December raised short-term interest rates to 0.75% on the view Japan was on the cusp of durably meeting its 2% inflation target.
With consumer inflation having exceeded its 2% target for nearly four years, the central bank has signaled its readiness to keep hiking borrowing costs if prices continue to rise steadily accompanied by higher wages.
(Reporting by Leika KiharaEditing by Shri Navaratnam)
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