Bank of Japan policymakers were split over the prospects of a wage hike, with one member pointing to the possibility of waning momentum for increasing wages at negotiations next spring, the minutes of their April 7-8 policy meeting showed Wednesday.
Some members said labor market conditions were “likely to continue tightening and upward pressure on wages was likely to strengthen further” on the back of the declining unemployment rate and that movements toward wage increases were spreading to a wider range of firms.
While one member pointed out that resumption of base pay increases could lead to a wage hike influenced by price increases, another expressed the view that “the momentum for increasing wages might instead decelerate” at the next wage talks, given a possible decline in the rate of increase in corporate profits.
Regarding the outlook of consumer prices, many members said that when labor market conditions tighten, nonmanufacturing tends to lead the trend, with the sector creating more employment than others, and prices are inclined to rise.
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