Japan Service Inflation Hits Two-Year High Amid BOJ Rate Hike Expectations

Japan's service-sector inflation has reached its highest level in over two years, according to data released by the Bank of Japan (BOJ). The Services Producer Price Index (SPPI) rose 3.7% year-on-year in August, up from 3.6% in July.

The increase was driven by higher freight, advertising and rental lease fees, indicating broader price pressures in Japan's economy.

The BOJ had previously raised its key interest rate by 25 basis points to 1.25% from 1% earlier this month, aiming to adjust monetary policy as inflation and wage pressures continue to rise.