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Bank of Japan policy-board member Junko Nakagawa said a wage trend is a major risk factor for the future course of inflation.
“While wages are expected to increase along with improvements in the economy, it is strongly uncertain how big the rise would be,” Nakagawa said Wednesday.
Any sluggish wage growth would add downward pressure on prices, she said. The Japanese central bank expects consumer inflation to fall below its 2% target later this year from around 4% currently.
Large Japanese companies have already announced bold wage increases to respond to inflation. The central bank is carefully monitoring whether smaller companies will follow suit, Nakagawa said.
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