"The economy is proving Kuroda right. This is the first time in a while that the BOJ doesn't have to boost stimulus because the economy is moving in line with their expectations"
-Takeshi Minami, chief economist at the Norinchukin Research Institute
Japan's tertiary industry activity index rose more-than-expected in May, advancing a seasonally adjusted 1.2% to 100.8 compared to a month earlier, the Ministry of Economy, Trade and Industry announced Wednesday. That overshot analysts' forecasts for a 0.7% gain after a flat reading in April. Industries that push the index up included finance, scientific research, communications, retail trade, accommodations, real estate, personal services, health care and utilities. Also, an index measuring Japan's prices of domestic corporate goods inched up 0.1% to 101.6 in June from the previous month, according to the Bank of Japan, beating expectations for a flat reading. On a yearly basis, prices rose 1.2% in line with forecasts and up from the downwardly revised 0.5% increase a month earlier. Export prices fell 0.4% on month and 2.2% on year, whereas import prices declined 0.4% and 2.6%, respectively.
Meanwhile, economists speculate that the BOJ's board will leave the scale of monetary stimulus unchanged at its two-day meeting starting on Wednesday. Governor Haruhiko Kuroda backed away from extra actions to calm bond-market volatility in June, convincing analysts and investors he would refrain from introducing bold stimulus after his aggressive move in April.
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