Japan Services Inflation Holds at 3.2% as Department Store Sales Slump

Japan’s services-sector inflation eased only marginally in June while retail sales at department stores fell sharply, underscoring mixed signals for domestic demand ahead of the Bank of Japan’s policy meeting next week. The Services Producer Price Index rose 3.2% from a year earlier, matching economists’ expectations and down slightly from May’s 3.3% gain. The figure suggests input-cost pressures in the services industry remain elevated even as momentum moderates. Separately, data from the Japan Department Stores Association showed nationwide department store sales slid 7.8% year on year in June, deteriorating from May’s 7.0% decline. Sales in Tokyo, a bellwether for urban consumption, tumbled 10.6% after a 9.1% increase the previous month, indicating a sharp pullback by shoppers.