MNI BRIEF: Japan June Services PPI Rises 3.0% Vs. May's 2.7%

Japan's services producer price index rose 3.0% y/y in June, accelerating from May's revised 2.7% and marking the highest level since March 2015 when it gained 3.1%, showing corporate pass-through of cost increases continued steadily, preliminary data released by the Bank of Japan on Thursday showed.

The June index was driven by advertising (+6.9% vs. +2.1%) and other services, including hotels, (+4.0% vs. 3.6%), although transportation and postal services (+2.7% vs. +3.0%) weakened.

The index of services with high labour cost ratio rose 2.8% y/y in June, unchanged from May's 2.8%, but the index of services with low labour cost ratio increased 3.2% y/y in June, accelerating from 2.5% last month.

The data showed firms are raising wages to ensure necessary workers on the back of continued labour shortages.

The BOJ continued to focus on whether firms are transferring high labour costs to retail prices, a BOJ official told reporters. (See MNI POLICY: Consumption Risk Could Make BOJ Hike Harder)