Bank of Japan Governor Kuroda
  • There is a broadening trend where rising inflation is reflected in wages
  • Job market tightening is laying the groundwork for wages to rise further
  • Hopes that inflation target can be achieved together with rising wages

Kuroda's term as governor of the Japanese central bank will come to an end tomorrow. It is rather unfortunate that they haven't managed to achieve much else during his tenure, with negative interest rates and ultra easing policy being the cornerstones of what was needed amid economic and demographic challenges in the past decade.

But he is at least setting up the platform for his successor, Kazuo Ueda, to perhaps be able to launch Japan out of the existing policy cycle - something which looked like an impossible scenario before the Covid pandemic.