BOJ May Hike Rates Soon Amid Rising Service-Sector Inflation in Japan

Japan's service-sector inflation accelerated in July, according to data released on Wednesday. The services producer price index, which measures prices firms charge each other for services, rose 3.6% year-on-year in July.

This increase follows a revised 3.4% rise in June, as reported by the Bank of Japan. The latest figures add to evidence of broadening price pressures in the economy, strengthening the case for a near-term interest rate hike.

Sources have indicated that the BOJ is likely to raise rates as soon as September and may consider a more aggressive pace of increases thereafter, compared with the current trajectory of roughly two hikes per year.