MNI BRIEF: Wage Hike Chances Rise, Rengo Survey In Focus - BOJ

Bank of Japan officials believe the chance of fiscal 2024 wage hikes has increased, due to economic and price conditions, however, the country's exposure to overseas economies still poses downside risk, MNI understands.

High actual inflation, tight labour markets and elevated corporate profits, which drove wage hikes in fiscal 2023, will continue next year, increasing the positive outlook for wage hikes in fiscal 2024.

However, a sustainable economic recovery, including a moderate increase in private consumption, without the materialisation of downside risks overseas is a crucial precondition for wage hikes, bank officials believe.

Bank officials expect the outlook for wage hikes at major firms to be available before the end of this year, however, forecasting increases at smaller firms remains a challenge. They will use the results of the first wage survey by Japanese Trade Union Confederation (Rengo) available in early March 2024 to ascertain smaller firms’ overall wage hikes.