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MNI BRIEF: BOJ On Watch As Japan Services PPI Slows

(MNI) Tokyo

Japan's services producer price index rose 1.5% y/y in December, marking the 22nd straight rise but slowing from November's 1.7% increase, preliminary data released by the Bank of Japan on Thursday showed, suggesting services inflation is more muted than in many countries.

At least two BOJ board members at the January meeting said that the rise in services prices is necessary to achieve the 2% price target, the summary of opinions released Thursday showed. Unless services prices rise, Japan’s inflation rate is unlikely to pick up in the required stable and sustainable manner and policymakers continue to focus wages in the service sector and its impact on retail prices.

The slower December rise was due mainly to higher prices for transportation and postal activities (+2.5% y/y in Dec. vs. +3.1% in Nov.) and leasing and rentals (+5.2% vs. +5.6%).

Source: Bank of Japan

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MNI Tokyo Bureau | +81 90-2175-0040 |

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