MNI BRIEF: Japan Oct Services PPI Rises 2.9% Vs. Sept 2.8%
MNI (TOKYO) - Japan’s services producer price index rose 2.9% y/y in October, accelerating from September’s revised 2.8%, showing that corporate pass-through of cost increases remained solid in addition to price revisions, preliminary data released by the Bank of Japan on Tuesday showed.
The SPPI rose 0.8% m/m in October after falling 0.1% in September.
The October index was boosted by transportation and postal activities (+3.3% y/y vs. +1.6%) and by advertising services (+4.9% vs. +4.6%).
The index of services with a high labour-cost ratio rose 3.3% y/y in October, accelerating from 2.9% in September, while the index of services with a low labour-cost ratio rose 2.8% y/y, also accelerating from 2.5%.
The rise was mainly caused by corporate price revisions during the month as businesses traditionally revise retail prices every October and April.
The data showed that firms are steadily transferring higher labour costs to retail prices, supporting the BOJ’s view that the wage-price virtuous cycle is strengthening. (See MNI POLICY:Equities, Politics To Weigh On BOJ Dec Decision)