Overview

• The BOJ governor said wage growth is spreading from large enterprises to small and mid-sized firms, reinforcing a broader pay upswing.
• He expects the labor market to stay tight barring a major negative demand shock, keeping upward pressure on wages.
• Core consumer prices excluding fresh food rose 3.1% in July from a year earlier, remaining above the BOJ’s 2% target.
• Investors have increased bets on another rate hike this year, with Japan’s 10-year government bond yield hitting its highest level since 2008.
• Ueda highlighted limited labor supply, noting only about half of employed women work full time and that foreign workers are 3% of the workforce yet accounted for over half of labor force growth in 2023–24.