TOKYO, Feb 22 (Reuters) - Japan's business-to-business
services prices rose 1.6% in January from a year earlier, much
slower than a 9.5% jump in wholesale goods prices, a sign the
recent pick-up in inflation is driven largely by cost-push
factors rather than higher wages.
The data highlights the dilemma faced by the Bank of Japan
(BOJ) as tame wage growth weighs on consumption and the broader
economy, forcing the central bank to hold off raising interest
rates even as inflation well exceeds its 2% target.
The year-on-year rise in the services producer price index,
which measures the price companies charge each other for
services, followed a 1.5% increase in December. It marked the
23th straight month of increase, BOJ data showed on Wednesday.
Japan's economy averted recession but rebounded much less
than expected in the fourth quarter as business investment
slumped, underscoring the fragile nature of the country's
delayed recovery from the COVID-19 pandemic.
While real wages rose in December for the first time in nine
months due to temporary bonus payments, household spending slid
1.3% year-on-year that month in a sign of the pain consumers are
feeling from the rising cost of living.
Japan's core consumer inflation hit 4.0% in December, double
the central bank's 2% target, as companies continued to pass on
rising energy and raw material costs to households.
(Reporting by Leika Kihara; Editing by Jacqueline Wong)
Messaging: leika.kihara.reuters.com@reuters.net))
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