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Bank of Japan Governor Haruhiko Kuroda anticipates that the persistent tightness in the labor market will continue to drive wage levels upwards, hinting at the imminent arrival of stable inflation. In his address at the annual Jackson Hole symposium of the Federal Reserve in Wyoming on Saturday, Kuroda noted that wage growth has expanded from large corporations to encompass small and medium-sized enterprises. He further emphasized that unless a significant negative demand shock materializes, the labor market is projected to stay tight, exerting upward pressure on wages. Although Kuroda did not directly discuss monetary policy, his remarks may prompt market speculation regarding another interest rate hike this year. The Bank of Japan has pinpointed labor shortages as a pivotal factor in fueling inflation via wage growth.
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