MNI BRIEF: Smaller Firms Split Over Wage Hikes - BOJ Report
Several Bank of Japan branch managers expect smaller firm wage hikes equal to, or higher than 2023 following strong wage hikes at major firms, but the results could be mixed as firms eye profits and rivals, the BOJ’s regional economic report said on Thursday.
Continued tight labour market conditions are behind wage hike decisions, however, some smaller firms remain cautious about raising wages on the back of poor profits, while others plan to increase only after monitoring wage hikes at rival firms, the report noted.
The managers also said the pass-through of cost increases is moderating and some firms are restricting retail price hikes amid households’ saving, while others are reducing.
MNI reported the BOJ may consider April policy action should services inflation remain strong. (See MNI POLICY: April Services Data Key For Further BOJ Rate Move)