Initial wage awards by big firms heartens BOJ – MNI
|The initial wage hikes at major firms are cheered by the Bank of Japan (BOJ) officials but they remain skeptical if higher wages will filter to smaller firms, MNI reports, citing people familiar with the BOJ thinking.
Key takeaways
“Now the focus for the BOJ is whether wages hikes at smaller firms go above the 1.86% level seen in 2021, which was the first time in eight years that wages fell below 2%. Higher wages are vital for the BOJ's target of stable 2% inflation and to trigger a virtuous economic cycle.”
“The BOJ estimates household "forced savings" of JPY20 trillion on a cumulative basis for 2020 (excluding the amount of special cash payments put aside for savings), for around 7% of potential disposable income that were used as some lockdown conditions were eased in the fourth quarter.”
“The BOJ said when new restrictions are lifted this year, spending from these funds may again be used, but not have the same potential impact as other prices have gained."
The BOJ is scheduled to announce its latest policy decision on Friday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.