Bank of Japan Gov. Kazuo Ueda said he expects a tight labor market to keep upward pressure on wages, reflecting his view that stable inflation is set to take hold.
¡°Wage growth is spreading from large enterprises to small and medium enterprises,¡± Ueda said Saturday in remarks at the Federal Reserve¡¯s annual symposium in Jackson Hole, Wyoming. ¡°Barring a major negative demand shock, the labor market is expected to remain tight and continue to exert upward pressure on wages.¡±
Ueda¡¯s remarks are likely to support growing market speculation of another interest rate hike this year, although he didn¡¯t directly discuss monetary policy in his presentation. The BOJ has identified Japan¡¯s labor shortage as a key factor in driving up inflation via wage growth.
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