TOKYO, Reuters – The index that measures the prices Japanese companies charge for their services rose at an annual rate of 2% in April, according to data released on Thursday. This is a signal that there are increasing inflationary pressures across the entire economy.

According to Bank of Japan data, the services producer price index grew 1.7% in April compared with March. This was an acceleration of the 1.3% increase in March. It also marks the fastest annual rate of growth since February 2022.

This was mainly due to rising freight costs overseas, but rental, advertising, and hotel fees increased too as service companies began passing higher prices on to their customers.

When deciding when to follow the lead of other central banks and raise ultra-low rates, the BOJ will look closely at service price outlooks.

Haruhiko Kuroda (BOJ Governor) has supported keeping rates low, noting Japan’s moderate wage and growth in service prices. Kuroda says that recent cost-push inflation won’t last unless there is strong domestic demand.

Kuroda stated Wednesday that wages in Japan have increased, although the pace of growth has remained steady.

The common problem for all countries is to identify the intensity and duration of inflationary pressure. He said that it is crucial to understand the relationships between the price of goods, services, wages and commodities in order to do this.