Data released on Tuesday (November 26) showed that Japan's leading indicator of service sector inflation stabilized at nearly 3% in October, reinforcing the Bank of Japan's view that rising wages are prompting more companies to pass on labor through price increases. rising costs. The Bank of Japan is watching services inflation closely for clues as to whether demand-driven price increases have widened enough to justify further interest rate hikes. The data will be one of the factors considered by the Bank of Japan at its next policy meeting in December. Some analysts expect the Bank of Japan to raise interest rates by then. Data from the Bank of Japan showed that the service industry PPI, which measures the fees companies charge each other for services, rose 2.9% year-on-year in October, higher than 2.8% in September. The rise was driven by growth in services such as machinery repairs, accommodation and construction work, the data showed. Bank of Japan Governor Kazuo Ueda has said Japan's economy is moving toward sustained wage-driven inflation, which could allow the central bank to raise still-low interest rates again. "We are seeing progress on the domestic front," Ueda said at a news conference last week, pointing to growing signs that wages will continue to rise and prompt companies to raise prices not just for goods but also for services. . Consumer inflation data released last week showed that the price of services charged by businesses to households rose by 1.5% year-on-year in October, up from 1.3% in September. October's inflation data is closely watched as a sign of things to come, as many Japanese companies typically charge for half-year services in April and October. The Bank of Japan ended negative interest rates in March and raised short-term policy rates to 0.25% in July as it believes the country is on track to achieve its 2% inflation target on a sustained basis.