BOJ Data Fuels Japan Rate Hike Speculation

Japan's business service prices have accelerated, according to data released by the Bank of Japan (BOJ) on Wednesday. The costs of services among companies climbed 3.6% from a year ago in July, the latest sign of inflationary pressure stemming from the ongoing conflict in the Middle East.

The prolonged conflict is forcing companies to use more expensive alternative shipping routes, with ocean freight transportation surging by 67.4% last month. This represents the biggest gain in data going back to 1986.

These developments add weight to speculation that the BOJ will raise its benchmark interest rate next month. The acceleration of service price gains is a key indicator for the central bank's monetary policy decisions.