An index measuring prices Japanese firms charge each other for services rose in April at the fastest annual pace in more than two years, a sign that inflationary pressure is building broadly across the economy. The services producer price index rose 1.7 per cent in April from a year earlier, accelerating from a 1.3 per cent gain in March and marking the fastest annual pace of gain since February 2022, Bank of Japan (BOJ) data showed. The rise was driven mostly by surging overseas freight costs, but hotel, advertisement and rental fees also increased as more companies in the service industry began passing on their higher costs to customers. The outlook for service prices will be among key factors the BOJ will scrutinize in deciding how soon it may follow other central banks in raising ultra-low interest rates.
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