Recapping Japan’s corporate service inflation data earlier, that rose 3.3% year-on-year in May, just below April’s revised 3.4%, according to BOJ data.
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The Bank of Japan is closely watching service-sector prices for signs that wage-driven inflation may become sustained.
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The services producer price index reflects what businesses charge each other for services and is a key gauge of domestic inflation pressures.
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The BOJ raised rates to 0.5% earlier this year after ending its ultra-loose monetary policy, betting inflation could hold near its 2% target.
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However, economic risks from higher U.S. tariffs have led the BOJ to cut its growth forecasts, complicating the timing of future rate hikes.
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A narrow majority of economists now expect the next 25bp hike in early 2026.
This article was written by Eamonn Sheridan at www.forexlive.com.