Helena Lyng Blak
11 weeks ago

Japan: Will pay raises lead to positive rates?

In a move that could significantly impact the global economy, the BoJ is considering an end to its era of negative interest rates.
Graphic decpiting an upwards arrow filled with a Japanese yen in front of a Japanese flag.
DesignRage / Shutterstock.com

The central bank of one of the world’s major creditors, may be on the brink of a considerable policy shift.

Anticipating significant wage increases in the year's forthcoming annual wage negotiations, an increasing number of Bank of Japan policymakers are considering ending negative interest rates, as reported by Reuters.

After decades of stagnant wages, the tides are shifting. Last year saw Japanese workers receiving the largest wage increases since the 1990s.

UA Zensen, Japan’s biggest industrial union group, representing over 2,000 affiliate members, announced that several of its member unions have achieved their wage increase demands, securing a 6.7% raise for full-time workers. Continuing discussions this week include Toyota, the world's largest car manufacturer, according to reports by Reuters.

According to Financial Times, Bank of Japan officials are likely to increase the policy rate to 0.1%, amid discussions on the potential implications of ending negative rates and its impact on the international markets.

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