11 Feb 2015
Japanese inflation might reach BoJ’s 2% target by 2016 – BNPP
FXStreet (Barcelona) - Raymond Van der Putten of BNP Paribas, views that Japanese macro wage growth in 2015 and 2016 might aid inflation to reach BoJ’s 2% target by 2016.
Key Quotes
“In addition to energy prices, wages are an important determinant for price trends. In 2014, they rose by 0.7% higher. All attention is now on the spring wage offensive (shunto).”
“As last year, the government is calling on enterprises to do their utmost to implement pay hikes. As the labour market has become very tight, we expect that at the shunto wages will be hiked in FY 2015 by an overall 2.6% (against 2.2% in FY 2014). These talks affect union workers only at relatively large companies and account for just 17.5% of the country’s labour force. It is, however, likely that these increases will also spread to other sectors.”
“Macro wage growth could reach 1.6% in 2015 and 2.8% in 2016. In this scenario, inflation could reach the BoJ’s 2% objective in the course of 2016.”
Key Quotes
“In addition to energy prices, wages are an important determinant for price trends. In 2014, they rose by 0.7% higher. All attention is now on the spring wage offensive (shunto).”
“As last year, the government is calling on enterprises to do their utmost to implement pay hikes. As the labour market has become very tight, we expect that at the shunto wages will be hiked in FY 2015 by an overall 2.6% (against 2.2% in FY 2014). These talks affect union workers only at relatively large companies and account for just 17.5% of the country’s labour force. It is, however, likely that these increases will also spread to other sectors.”
“Macro wage growth could reach 1.6% in 2015 and 2.8% in 2016. In this scenario, inflation could reach the BoJ’s 2% objective in the course of 2016.”