TOKYO (Reuters) – A key indicator of inflation in Japan's services sector reached 3 percent in November, accelerating for the second month in a row, data showed on Wednesday, supporting the central bank's view that higher wages are prompting more companies to pass on higher costs. .
The Bank of Japan is closely monitoring services sector inflation for clues as to whether demand-driven price gains are widening enough to justify further interest rate hikes.
November's year-on-year increase in the services producer price index, which measures the prices companies charge each other for services, accelerated from a 2.9% increase in October, Bank of Japan data showed.
The Bank of Japan ended negative interest rates in March and raised the short-term interest rate to 0.25% in July on the view that Japan is making steady progress towards achieving its 2% inflation target permanently.
Governor Kazuo Ueda said the Bank of Japan will continue raising interest rates if inflation remains on track to steadily reach 2% as he expects.
