Japan’s Services Inflation Rises 3.7% as Freight Prices Surge

Japan’s services producer prices accelerated in September as ocean freight costs surged, while inflation in high-labor-cost services slowed, adding a mixed signal before the Bank of Japan’s next policy review.

The preliminary Services Producer Price Index (SPPI) rose 3.7% from a year earlier, up from August’s revised 3.5%. The index, which uses 2020 as its base year, increased 0.3% from the previous month and reached 115.5. The data were released at 7:50 p.m. ET Oct. 26 (11:50 p.m. UTC), corresponding to 8:50 a.m. Japan time Oct. 27.

Ocean freight prices rose 97.7% year over year, compared with August’s revised 74.6%. Ocean freight’s contribution change was 0.20 percentage point; the all-items annual rate rose 0.2 percentage point at published precision.

The measure excluding international transportation held at 2.9%, unchanged from August’s revised rate, and rose 0.2% from the previous month. Prices in services with a high labor-cost ratio rose 2.6% year over year, down from 2.7%. The low-labor-cost group’s annual increase accelerated to 4.8% from 4.4%.

The SPPI tracks prices for services provided to businesses and Japan’s central and local governments. It excludes services provided only to consumers, so it is distinct from consumer inflation. Its labor-cost groups classify services by labor-cost share and track service prices, not employee pay.

The Bank of Japan (BOJ) meets Oct. 29-30 in Japan. Its policy statement and October economic outlook are scheduled for Oct. 30, though no release hour has been set. At its September meeting, the BOJ set its overnight call-rate guideline at around 1.25%, effective Sept. 24. It said future increases would depend on economic activity, prices, financial conditions and risks to its outlook.

The figures provide policy context for digital-asset markets, but the SPPI does not measure Bitcoin (BTC) positioning, yen-funded crypto borrowing or a current deleveraging event.