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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