BOJ says 3% wage gains needed for price goal

Bloomberg

Bank of Japan Governor Haruhiko Kuroda endorsed a Japanese government call for employers to raise wages by 3 percent a year — far faster than the current pace — to help the central bank meet its inflation target.
“The government request for 3 percent wage increase is quite appropriate,” Kuroda said during a panel discussion at a European Central Bank forum in Sintra, Portugal. Though the pace of Japan’s wage gains has picked up in 2018, they remain a missing link in the central bank’s push to get inflation to its 2 percent goal.
“While the labour productivity increase is around 1 percent, that means a 3 percent wage increase is necessary to be consistent with a 2 percent price stability target,” Kuroda said on a panel with Federal Reserve Chairman Jerome Powell, ECB President Mario Draghi and Reserve Bank of Australia Governor Philip Lowe.
The Japanese government has been asking labor and business to raise wages in the last five years, this year urging a 3 percent wage increase during so-called spring offensive.
“The final result is not yet known,” Kuroda said.
“Also the government has been raising minimum wag-es by 3 percent almost eve-ry year,” he said. “This is consistent with our price stability target.”