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Japan services PMI cools, but price pressures keep BOJ hike door open

The September survey showed output prices near record highs and hiring at the fastest pace since February, with S&P Global flagging October as a possible timing for another BOJ rate hike.

Reported · Written up by our desk · Central Banks

Japan’s services PMI eased to 51.3 in September from 52.5 in the prior month, but hiring accelerated at the fastest pace since February, according to S&P Global’s Japan Services PMI data summarized by Forexlive.

The survey also pointed to continued inflation pressure, with output price inflation near record highs as payrolls rose and backlogs built, indicating capacity strain that could support another rate increase by the Bank of Japan.

Forexlive reported that S&P Global explicitly flagged October as a possible window for a BOJ hike, which may affect near term expectations for policy and market pricing.

The outlet also noted that oil was cited as a cost driver for the services prices, while weak export demand and earthquake disruption were the main soft spots that could make the BOJ more cautious.

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