Japan’s service inflation hits two-year high, bolstering BOJ rate-hike case

Prices for services that companies sell to one another rose quickly in Japan in August.

They increased 3.7% compared with the same month last year.

This was faster than the increase in July and the fastest rise since June 2024.

Freight, advertising and rental fees helped push prices higher.

Service prices are important because they are often connected to workers’ wages.

If companies raise prices to cover higher wages, inflation may last longer.

The Bank of Japan may see this as evidence that inflation is spreading through Japan’s economy.

That could make the central bank more willing to raise interest rates again.