Japan Services PPI Rises to 3.7% in September, Supporting Bank of Japan Rate Expectations

Japan's services producer price index rose 3.7% year-on-year in September, matching market forecasts following a downwardly revised 3.5% reading for August. However, services inflation excluding international transportation held steady at 2.9%, as ocean freight surging from 74.6% to 97.7% drove headline gains, while high labor-cost services inflation eased to 2.6%. Meanwhile, goods PPI slowed to 6.8% from 7.6%. The data precedes the Bank of Japan's October 29-30 policy meeting, where policymakers are widely expected to keep the benchmark rate at 1.25% amid anticipation of a prospective December hike.