TOKYO Reuters - The prices Japanese companies charge each other for services went up 1.0% in October from a year earlier, their eighth month of gains and a sign that inflationary pressure was building due to higher global commodity costs.
The services producer price index hit 105.4 in October, the highest since November 2001, Bank of Japan BOJ data showed on Thursday.
The gain was much smaller than the 8.0% increase in wholesale goods inflation in October, suggesting that slow wage growth will moderate consumer prices.
Transportation fees were the main factor behind the October services price rise, as robust global demand for raw materials allowed shipping firms to pass on higher fuel costs to clients.
The cost of ocean freight transportation increased by 52.0% in October from a year earlier in the year, after a 34.9% gain in September.
After the Sept. 30 lifting of the curbs to combat the COVID 19 epidemic, hotel fees decreased to 2.9% in October from 7.4% in September, a sign that hotel consumption was picking up.
The lifting of the curbs has helped boost demand for corporate services, with a rebound in some sectors. Shigeru Shimizu, head of the BOJ's price statistics division, said that the move hasn't broadened much on the lingering caution over the epidemic.
Japan's economy has lagged other advanced nations in recovering from the Pandemic Doldrums, discouraging firms from passing on higher raw material costs to consumers.
In October, consumer prices increased by just 0.1% from a year earlier, even as fuel costs accelerated at the fastest pace in more than a decade.