MNI BRIEF: Japan Feb Services PPI Rises 3.0% Vs. Jan 3.2%

Japan’s services producer price index rose 3.0% y/y in February, decelerating from January’s revised 3.2%, but remained consistent with solid corporate pass-through of cost increases, preliminary data released by the Bank of Japan on Wednesday showed.

Advertising services (+0.8% vs. +3.3%) and transportation, and postal services (+3.3% vs. 3.5%) drove the index lower. 

The SPPI was unchanged m/m in February after falling 0.5% in January.

The index of services with high a labour cost ratio rose 3.3% y/y in February, unchanged from January, while the index of services with a low labour cost ratio rose 2.6% y/y in February, slowing from 3.1%.

The data showed firms are raising services prices on the back of high labour and raw materials costs due to the labour shortage.

BOJ officials are focused on whether expected wage hikes will cause services prices rises in or after April, as they have not been sufficiently strong enough to achieve the 2% price target to date.