MNI BRIEF: Japan May Services PPI Rises 1.6% Vs. Apr's 1.6%

Japan's services producer price index rose 1.6% y/y in May, marking the 27th straight rise following April's 1.6%, with the severe labor shortage and wage increases driving the elevated level, preliminary data released by the Bank of Japan on Monday showed.

The BOJ will focus on whether services prices will continue rising as Japan’s inflation rate remains unstable and unsustainable and whether high prices impede private consumption.

Seiji Adachi and Asahi Noguchi, both BOJ board members, said last week they are focused on services prices to gauge their outlook for inflation (see: MNI BRIEF: Upside Price Risks Exist - BOJ's Adachi & MNI BRIEF: Watch Trade Off on Policy Changes - BOJ Noguchi).

The May rise was due mainly to higher prices for leading and rental (4.6% in May vs. 4.2% in April) and information and communications (0.7% against 0.6%). The SPPI fell 0.1% from the previous month in May, slowing from revised 0.1% in April.