Japan's Services Producer Price Index climbs 2.7 percent in February

The Services Producer Price Index (SPPI) for all items in Japan rose 2.7 percent year-on-year in February 2026. The index excluding international transportation also increased by 2.7 percent from the previous year.

Services prices maintain upward momentum

The Services Producer Price Index (All items) for February 2026 reached 112.1 (CY2020 = 100), marking a 2.7 percent increase compared to the same month last year.

This follows a 2.6 percent yearly change in January.

The monthly change for February was 0.2 percent.

Similarly, the SPPI excluding international transportation stood at 111.8, also showing a 2.7 percent year-on-year rise and a 0.2 percent monthly increase.

This sustained upward trend in services prices indicates ongoing inflationary pressures within the Japanese economy, building on the 3.0 percent annual increase observed throughout 2025 for both indices.

The data suggests a broad-based firming of prices for services provided by businesses.

Mixed contributions across sectors

Several major groups contributed to the overall yearly change in February.

Notable positive contributions came from Hotels, with a significant 8.5 percent yearly change, and Civil engineering and architectural services, which saw a 5.9 percent increase.

Television and radio advertising also showed strong growth at 8.4 percent, while Ocean freight transportation surged by 9.7 percent.

Conversely, some sectors experienced more subdued growth or slight declines in their yearly change.

Worker dispatching services increased by 2.6 percent, a slight deceleration from the previous month.

Waste disposal also saw a 2.6 percent rise, while Leasing recorded a 2.6 percent increase.

These varied movements highlight the complex dynamics influencing services prices across different segments of the economy.

Steady rise, policy implications

The continued, albeit stable, increase in the Services Producer Price Index is a critical indicator for the Bank of Japan.

It suggests that underlying cost pressures are persisting, which could eventually feed into consumer prices.

For monetary policy, this sustained upward momentum in services inflation reinforces the narrative of a gradual move away from deflationary pressures.

The BOJ will likely monitor these figures closely as it considers the timing and pace of any further normalization of its ultra-loose monetary policy.