Wide range of Japanese firms see need to hike wages, Bank of Japan says
A WIDE range of Japanese firms see the need to continue raising wages due to structural labour shortages, the Bank of Japan (BOJ) said on Thursday (Jan 9), suggesting conditions for a near-term interest rate hike were continuing to fall into place.
The BOJ has repeatedly said sustained, broad-based wage hikes are a prerequisite to tighten monetary policy further.
In a statement on the health of regional economies, the central bank added that many parts of Japan saw broadening price hikes from firms seeking to pay higher wages.
Some firms said they are yet to decide how much they would raise pay this year, while other smaller companies remained cautious about hiking wages due to the impact of higher costs on profits, the BOJ said.
“On the other hand, some firms were already discussing details on the pace of rate hikes. Taken together, there were many reports saying a wide range of firms see the need to keep hiking wages,” it said.
The BOJ raised its economic assessment for two of Japan’s nine regions and maintained its view for the remaining areas, saying they were picking up or recovering moderately.
The findings, announced after a quarterly meeting of the BOJ’s regional branch managers, are among factors the central bank will scrutinise at its next policy-setting meeting on Jan 23 to 24. Some analysts expect the central bank to raise interest rates from the current 0.25 per cent at the meeting. REUTERS
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