BoJ board member Seiji Adachi acknowledged that while there are early indications of a positive wage-inflation cycle emerging, these are not yet sufficient to consider exiting ultra-loose monetary policy.
He emphasized the importance of continuing with monetary easing approach, stating today, “For now, it’s appropriate to patiently continue with our monetary easing.”
Adachi specifically pointed out the challenges posed by China’s slowing growth and the potential impacts of aggressive US interest rate hikes, noting that these factors make it difficult to predict whether Japanese firms will substantially increase wages next year.
He also addressed the disparity in wage increase capabilities between large and small companies. While some big companies seem prepared to continue raising wages, many smaller firms, particularly in regional areas, are struggling to do so due to challenging business conditions.
He emphasized, “We’re not at a stage yet where we can discuss an exit” from ultra-loose policy.
