* Corporate services prices up 1.5% yr/yr in May
* Advertising fees, hotel bills rebound from last year's
* Rising global demand push up overseas freight costs
* Uncertainty on whether firms will pass on costs to
TOKYO, June 24 (Reuters) - Japan's corporate services prices
rose at the fastest annual pace in eight months in May, data
showed on Thursday, adding to growing signs the world's no. 3
economy is gradually emerging from last year's devastating
impact of the coronavirus pandemic.
While the gain was due largely to the base effect of last
year's slump, rising hotel and transportation fees showed a
resumption of economic activity and rising raw material costs
were keeping Japan from sliding back into sustained deflation.
"The impact of state of emergency curbs wasn't as large as
the same period last year," Shigeru Shimizu, head of the BOJ's
price statistics division, told a briefing. "Some regions saw
tourists return during Japan's Golden Week holidays."
The services producer price index - the price firms charge
each other for services - rose 1.5% in May from the same month a
year ago, the third straight monthly gain and the fastest pace
of increase since September last year, Bank of Japan data
Television advertising fees surged a record 35% in May from
a year earlier, due largely to the base effect of last year's
plunge. Overseas freight costs were up a record 34%, reflecting
a spike in fuel costs and robust China-bound shipping demand,
the data showed.
Hotel bills were up 0.3%, marking the first rise in two
years, as some domestic tourist destinations saw a rebound in
visitors despite state of emergency curbs imposed in some
prefectures during May.
The data showed the number of components in the index that
saw prices rise stood at 76 in May, up 15 from April - a sign
inflationary pressures were broadening.
There is uncertainty, however, on whether the rise in
wholesale prices will lead to higher consumer inflation.
Companies remain wary of passing on increasing costs to
households due to sluggish domestic demand.
Japan's core consumer prices rose 0.1% in May from a year
earlier, their first such gain in more than a year but due
largely to a rebound in energy prices.
The Japanese economy shrank an annualised 3.9% in the first
quarter, and many analysts expect any rebound to be modest in
April-June as state of emergency curbs to combat the pandemic
The government has now eased restrictions, but said it would
maintain 'quasi-emergency' measures in some areas, including
Tokyo, until July 11 to prevent infections from rising ahead of
the Tokyo Olympic Games starting on July 23.
(Reporting by Leika Kihara; Editing by Kenneth Maxwell)