Japan’s Service Inflation Hits 2% for First Time in 30 Years
- Spreading price growth can be a catalyst for BOJ shift
- Inflation has been stickier than the BOJ has expected
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Japan’s price growth in services hit 2% in July for the first time in 30 years, a long-awaited development for the central bank as it waits for evidence of sustainable inflation before laying out a path toward policy normalization.
Service inflation accelerated to 2% from 1.6% in June, driven by higher costs for telecom, lodging and entertainment, the internal affairs ministry reported on Friday. Barring the impact of a 1997 sales tax hike, service inflation had remained below 2% since 1993.