Surge in Japan wholesale services inflation driven by a tight job market, inbound tourism

Earlier today we had the data for ‘wholesale’ services price inflation in Japan for coto:

• Japan data: PPI Services for October +2.3% y/y (expected +2.1%)

Reuters have posted recap points on the data:

• business-to-business
  service inflation accelerated in October
• a tight job market
  lifted labour costs
• underscoring a broadening of price
  pressures
• surge in inbound tourism drove up hotel fees 49.9%

And this:

• The data suggest Japan’s economy is making progress towards
  achieving sustained rises in inflation accompanied by solid wage
  growth.

Wage growth driving inflation is what the Bank of Japan wants to see before it pivots away from negative rates. The Bank says its awaiting the outcome of Spring wage talks. there is some speculation i  the market that meaningful change could come from the Bank in April.

• Former BOJ official says Bank expected to end its negative interest rate policy in April
• Poll – Economists predict Bank of Japan will end negative rates policy in 2024

This article was written by Eamonn Sheridan at www.forexlive.com. Source