Japanese wage inflation has so far remained subdued despite the downward trend in unemploymentn since 2003. This probably reflects consumer uncertainty over the outlook for the economy, with employees willing to sacrifice higher pay for greater job security. But looking ahead, the survey evidence suggests that the labour market is likely to strengthen further. This suggests that consumers will become less cautious over the next few months and that wage inflation will accelerate, putting upward pressure on final prices and interest rates.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services