MNI BRIEF: BOJ Sept Opinions: One Member Sees High Wage Hikes

One Bank of Japan board member spoke about the possibility of high wage hikes amid ongoing labor shortages at the September 21-22 policy meeting, the summary of opinions released on Monday showed.

“To achieve the price stability target in a sustainable manner, wage increases are crucial. Given, for example, the recent labor shortages, high wage increases might be one possible outcome,” one member said.

Another member said: “The various existing measures of core inflation have been highly susceptible to import prices, making it more difficult to interpret them. It should be reemphasized that it is necessary to pay close attention to the fundamental price formation mechanism, especially trends in wages.”

As for wage hikes, a different member offered a cautious view, saying “Japan is in a situation where labor market conditions need to tighten in order for wages to rise in a manner consistent with the price stability target of 2%.”

“The economic situation in Japan differs from those in the United States and the United Kingdom, where labor market conditions have already been tight and a wage-price spiral has been of concern,” the same member said.