MNI BRIEF: Japan March Services PPI Rises 3.1% Vs. Feb 3.2%

Japan’s services producer price index rose 3.1% y/y in March, decelerating from February’s revised 3.2%, showing that corporate pass-through of cost increases remained solid, preliminary data released by the Bank of Japan on Thursday showed.

The March index was lowered by leasing and rental (+2.4% vs. +3.3%) and transportation and postal services (+3.1% vs. +3.3%), although advertising services rose 2.7% vs. +1.6%.

The SPPI rose 0.7% m/m in March after rising 0.1% in February.

The index of services with a high labour cost ratio rose 3.4% y/y in March, unchanged from 3.4% in February, and the index of services with a low labour cost ratio rose 2.8% y/y in March, also unchanged from 2.8% in February.

The data showed that firms are raising services prices on the back of high labour and raw materials costs caused by continued labour shortages. Bank officials will focus on the price revisions and wage hikes in or after April.