Japan's Business Lobby Foresees BOJ Policy Shift Opportunity Ahead

14 Mar, 2024

Japan's Business Lobby Foresees BOJ Policy Shift Opportunity Ahead

The head of Japan's leading business lobby, Masakazu Tokura, expressed confidence on Monday (Mar 11) that the Bank of Japan (BOJ) is poised to transition towards a more normalized monetary policy in the near future, driven by increasing momentum for wage hikes. According to Tokura, there is a noticeable uptick in momentum for wage increases during this year's spring wage negotiations compared to the previous year. He remains optimistic that these wage hikes will extend beyond large corporations to encompass smaller businesses.

Additionally, Tokura emphasized the likelihood of Japan meeting the BOJ's 2 percent inflation target. He highlighted a growing possibility of the BOJ steering its policies towards normalization soon, albeit uncertain about the exact timing, suggesting a potential shift in March.

Tokura's remarks reflect a sentiment of anticipation within Japan's business community regarding an imminent policy shift by the BOJ. As the momentum for wage hikes gains traction and inflation targets become more achievable, businesses are preparing for potential adjustments in monetary policies that could shape the economic landscape in the coming months.