Ueda Kazuo: The tight labor market is expected to continue to exert upward pressure on wages.

Jin10 data, August 24 - At the Jackson Hole Central Bank annual meeting, Bank of Japan Governor Kazuo Ueda stated that the tight labor market is expected to continue to exert upward pressure on wages, reflecting his view that stable inflation is about to be established. Wage growth is spreading from large enterprises to small and medium-sized enterprises. Unless there is a significant negative demand shock, the labor market is expected to remain tight and continue to apply upward pressure on wages. Ueda’s remarks may fuel speculation in the market about another interest rate hike this year, although he did not directly address monetary policy in his speech. The Bank of Japan has identified Japan’s labor shortage as a key factor driving inflation through wage growth.