MNI BRIEF: Japan May Services PPI Rises 3.3% Vs. Apr 3.4%

Japan’s Services Producer Price Index (SPPI) rose 3.3% y/y in May, slightly easing from a revised 3.4% in April, indicating that firms are continuing to pass on higher costs, preliminary Bank of Japan data showed Wednesday.

The slight slowdown was driven by softer gains in information and communications services (+2.4% vs. +2.6%) and real-estate services (+2.7% vs. +2.9%). 

However, advertising services accelerated sharply, rising 2.5% compared to 0.9% in April.

On a monthly basis, the SPPI fell 0.1% in May, the first decline since January, following a 0.7% gain in April.

Prices for services with high labour cost ratios rose 3.7% y/y in May, down from 3.8% in April, while those with low labour cost ratios rose 2.9%, up slightly from 2.8%.

The data suggest that firms are continuing to raise services prices amid sustained labour shortages and high input costs, though the pace of pass-through has not accelerated despite corporate price revisions.