TOKYO : An index measuring prices Japanese firms charge each other for services hit a more than two-decade high in June, data showed on Tuesday, a sign the economic impact of rising global fuel and commodity costs was broadening out to many sectors.
The services producer price index rose 2.0 per cent in June from a year earlier, accelerating from a revised 1.9 per cent gain in May, Bank of Japan (BOJ) data showed. The index, at 106.9, hit the highest level since April 2001.
The rise was driven mostly by surging transportation fees as higher fuel costs were passed on to business customers.
Ocean freight transportation prices spiked 66.5 per cent in June from a year earlier, while fees for international air freight surged 84.9 per cent, the data showed.
Hotel fees also rose 19.8 per cent year-on-year in June, largely in reaction to a slump last year caused by the COVID-19 pandemic.
While goods prices have risen sharply in Japan reflecting the impact of global commodity inflation, services prices have increased only modestly due to slow wage growth.
The trend in services prices is key to when the Bank of Japan could withdraw its massive monetary support.
Governor Haruhiko Kuroda has stressed that inflation must be driven by strong demand, and accompanied by higher wages, to sustainably hit his 2 per cent target and allow for the BOJ to consider dialing back stimulus.
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