Corporate service prices rose at the fastest pace in more than 15 years, a sign that inflation is taking hold in the world's second-largest economy.
The prices companies pay for services such as rent and transportation climbed 1.6 percent in July from a year earlier, the Bank of Japan said in Tokyo Friday.
Higher costs of corporate services, oil and materials may prompt businesses to increase retail prices. Bank of Japan Gov. Toshihiko Fukui repeated his argument Thursday that consumer prices — which have fallen since February — will resume rising in the long term as the economy expands.
"With oil and raw materials costs staying at high levels, companies can't absorb all of them," said Mamoru Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. "Upward pressure for consumer prices is mounting."
Rising energy costs pushed up road-freight and shipping fees last month, the central bank said in the report. Office rents also climbed, and demand for TV ads increased ahead of the July 29 Upper House election.
The price of Dubai crude oil, the benchmark for Asia's main refiners, has risen 17 percent this year. A Bank of Japan index of 16 commodities advanced 7.2 percent in July from a year earlier, the fastest pace in four months.
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