Japan’s labour market has been tight for a while but the unemployment rate has continued to fall and now stands at a level last seen in the mid-1990s. The latest data show a long-awaited pick-up in wages too. The wage data can be volatile and it is notable that all of the strength has been in bonus increases, which are more readily reversed, rather than regular pay. Still, with output subdued and underlying inflation falling, the Bank of Japan can point to the labour market as somewhere where recent trends are going its way.
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