We wouldn’t read too much into the early results of this year’s spring wage negotiations, which showed that the large carmakers and electronic firms lifted base pay by less than in 2014 and 2015. But the bigger picture is that wage growth will remain well below the 3% rate that Bank of Japan Governor Kuroda considers necessary to push inflation to the 2% target. The BoJ will therefore continue to lag central banks elsewhere in terms of monetary policy tightening.
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