BOJ on Rate-Hike Watch as Japan Wage Growth Keeps Pace

Japan's wage growth remains strong, with real wages rising by 2.4% in July and nominal pay jumping 4.7%, according to recent government data. This increase is the largest since May 2021, outpacing price rises as inflation cooled. The labor ministry's inflation gauge ticked up to 2.2% from 1.9% in June.

The Bank of Japan (BOJ) is keeping a close eye on this wage growth, particularly ahead of its upcoming policy meeting next week. BOJ Governor Kazuo Ueda has stated that officials will debate rate hikes at meetings, including September, if inflation risks were rising. This suggests that tighter policy may be on the horizon.