Japan’s Mixed Inflation Picture Complicates BOJ Rate Hike Path
![](https://japannews.yomiuri.co.jp/wp-content/uploads/2023/10/2023-09-21T040008Z_402622899_RC22C3AX6ZX0_RTRMADP_3_JAPAN-ECONOMY-POLL.jpg)
The Bank of Japan is seen in Tokyo in September 20, 2023.
17:39 JST, March 26, 2024
TOKYO (Reuters) – Japan’s business-to-business service prices continued to rise steadily but a key measure of trend inflation slowed in February, painting a mixed picture on the price outlook that may complicate the central bank’s interest rate hike path.
The services producer price index, which measures what companies charge each other for services, rose 2.1% in February from a year earlier, data showed on Tuesday, unchanged from January in a sign companies continued to pass on labor costs thanks to prospects for sustained wage gains.
The data underscores the BOJ’s view that rising service prices will replace cost-push inflation as a key driver of price gains, and help sustain inflation around its 2% target.
But separate data released on Tuesday showed Japan’s weighted median inflation rate, which is closely watched as an indicator on whether price rises are broadening, slowed to 1.4% in February from 1.9% in the previous month.
The trimmed mean inflation rate, which excludes the 10 highest and lowest tail of the price distribution, hit 2.3% in February, slowing from 2.6% in January and marking the lowest year-on-year increase since September 2022, the data showed.
The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy last week, making a historic shift away from decades of massive stimulus that was aimed at reviving the economy.
BOJ Governor Kazuo Ueda has said the timing of future interest rate hikes will depend largely on whether trend inflation will move closer to the bank’s 2% target.
"News Services" POPULAR ARTICLE
-
FBI Identifies Thomas Matthew Crooks as ‘Subject Involved’ in Trump Rally Shooting
-
Donald Trump Whisked off Stage in Pennsylvania after Apparent Gunshots Rang Through the Crowd
-
Japanese Executive among 11 Arrested in Myanmar for Inflating Rice Prices
-
Japan’s Nikkei Reclaims 40,000 Level on Weak Yen, Foreign Buying (UPDATE 1)
-
U.S. President Joe Biden Drops Out of the 2024 Race after Disastrous Debate Inflamed Age Concerns
JN ACCESS RANKING