We need to have more conviction that wages will keep rising

Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday, “we need to have more conviction that wages will keep rising, rising wages lead to service prices and the economy remains strong, to ponder exit from easy policy.”

Ueda said, “there will always be new information coming in, so at any meeting there is a chance of making a certain decision,” when asked about the chance of BoJ foreseeing inflation sustainably hitting 2% target at the next policy meeting in December.

He said that “don’t expect 10-year JGB yield to rise sharply above 1% even after last week’s YCC tweak.”

Meanwhile, the Nikkei Asian Review is reporting that Japan’s largest industrial union UA Zensen is seeking a 6% of total wage increase at next spring negotiations.

Market reaction

The above comments fail to move the needle around the Japanese Yen, as the USD/JPY pair is currently trading 0.17% higher on the day at 149.63.