Japanese Wage Growth Misses Expectations, Weighing on BOJ Rate Hike Bets

Japan's labor cash earnings rose 3.7% year over year in July, falling short of the 3.9% market expectation.

The data add to a series of monthly wage readings being tracked for clues on household income momentum, with this release coming in 0.2 percentage points below consensus.

The soft wage growth is likely to prompt the Bank of Japan to reconsider its interest rate hike plans, as it suggests that domestic demand may not be strong enough to sustain higher rates.

In currency markets, a weaker Yen is expected, with traders advised to buy USD/JPY call options targeting a downward trend in the near term.