MNI BRIEF: Japan Feb Services PPI Rises 1.8% Vs. 1.6% In Jan

Japan’s services produce price index rose 1.8% y/y in February, accelerating from January’s 1.6% pace and showing services prices are rising due to severe labor shortages, preliminary data released by the Bank of Japan on Monday showed.

BOJ officials are focused on whether services prices will continue rising as Japan’s inflation rate will rise in a stable and sustainable manner unless services prices rise. Officials continue to focus on wage hikes in the service sector and the impact on retail prices. February's rise was the 24th consecutive monthly increase. The SPPI rose 0.2% from the previous month, reversing January's -0.3% decline.

The faster February rise was due mainly to higher prices for other services, such as hotels (which rose 30.1% in February vs. 18.7% in January) and advertising services (up 3.8% vs. a rise of 2.8% in January). A BOJ official said that rise in hotel prices was caused by the reopening of the economy and increased inbound tourism.