BoJ's Ueda expects tightening job market to push up wages

Bank of Japan Governor Kazuo Ueda said wage hikes are spreading beyond large firms and likely to keep accelerating due to a tightening job market, signaling his optimism that conditions for another interest rate hike were falling into place.

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The remarks are likely to reinforce market expectations that the central bank will resume a rate hike cycle, which was put on pause due to concern over the fallout from US tariffs on the export-reliant economy, later this year.

Despite Japan's dwindling working-age population, wage growth remained stagnant for decades due to “entrenched deflationary expectations” that discouraged companies from raising prices and pay, Ueda said at a panel held on Saturday during the Federal Reserve's annual conference in Jackson Hole, Wyoming.