Tokyo, Sept. 28 -- Japan's service-sector inflation rose to a more than two-year high in August, strengthening expectations that the Bank of Japan (BOJ) could continue raising interest rates.

The Services Producer Price Index (SPPI), which measures the prices companies charge each other for services, rose 3.7 per cent year-on-year in August, up from 3.6 per cent in July, according to data released by the BOJ on Monday.

The rise was driven by higher freight, advertising and rental lease fees, pointing to broader price pressures in Japan's economy.

"The Services Producer Price Index (All items) rose 3.7 percent from the previous year," the BOJ said. The index excluding international transportation costs rose 3.2 per cent year-on-year.

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