Japan has entered a new phase in its fight against deflation, but stronger wage growth and improved productivity are needed if the economy is to turn the corner, the Cabinet Office said in a report released Thursday.
Describing wage growth as "modest" for most workers, the report on the state of the economy said companies appear more willing to raise pay for part-timers being used to fill the labor shortage than for full-time workers.
"There has been a change in phase toward beating deflation," the government report said. "It's important to make a reality more powerful wage growth while boosting productivity, so prices can rise sustainably."