Helena Lyng Blak
10 weeks ago

Wage negotiations aid Bank of Japan

How the Japanese unions are paving the way for Governor of the Bank of Japan Kazuo Ueda.
Head office of the central bank of Japan in Tokyo
Leonid Andronov / Shutterstock

Earlier this week, Japan saw unprecedented wage hikes among some of the nation’s biggest employers, including Toyota, with Japanese trade union center Rengo reporting a pay growth of over 5%.

This is exactly what the Bank of Japan (BoJ) has been hoping for, as they are considering ending the era of negative interest rates

“In sharp contrast to the Euro zone, policy officials actually cheer on wage hikes in Japan as they see them as a crucial part of forming a ‘virtuous wage-price cycle’,” explains financial analyst Andreas Steno

Steno argues that it appears probable that these new wage agreements will become more widespread in Japan, with Toyota also strongly encouraging its suppliers to raise salaries more than what has been customary over the past few decades.

“The wage momentum leaves an interesting gap between CPI and wage growth in coming quarters,” he says.

“Which is probably likely to pull the rug from under the momentum among Japanese large caps. When they are faced with input cost increases from suppliers, they are likely going to get squeezed on their own margins short-term.”

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

5 hours ago Israeli Airstrike Hits Rafah Tent Camp Israeli airstrike on Rafah camp kills dozens, raising international alarm.
5 hours ago Meta and Call of Duty Maker Sued by Families of School Shooting Victims Families of the 2022 Uvalde school shooting victims file lawsuits against major corporations and officials, claiming they contributed to the tragedy.
7 hours ago Walmart and Capital One Call It Quits on Partnership Walmart and Capital One announce the end of their six-year card partnership amidst legal disputes.
1 minute ago US Market Open - May 27, 2024: Wall Street Wavers but Nasdaq Soars Daily update from the US market open.
10 hours ago Crypto, Currently: May 27, 2024 - Ethereum Leads Weekly Surge, Bitcoin Holds Steady Daily update on Ethereum, Bitcoin, and more!
1 day ago Debunking the headline: US GDP grows by a third ahead of EU in 15 years Europeans need not worry as much as these articles would suggest.
1 day ago Empowering Women Could Boost Economic Growth, Says IMF Economists Discover how gender equality initiatives could transform economies in Japan and Korea.