Economy

BOJ’s Ueda Sees Wages Remain under Upward Pressure

Reuters
Governor of the Bank of Japan Kazuo Ueda attends the Federal Reserve Bank of Kansas City’s 2025 Jackson Hole Economic Symposium, “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy,” in Jackson Hole, Wyo., on Saturday.

Jiji Press

12:01 JST, August 24, 2025

JACKSON HOLE, Wyo. (Jiji Press) — Bank of Japan Governor Kazuo Ueda said Saturday that wages in his country are expected to remain under upward pressure because of a tight labor market.

The Japanese labor market is “expected to remain tight and continue to exert upward pressure on wages,” Ueda said at a panel discussion as part of the U.S. Federal Reserve’s annual economic conference in Jackson Hole, Wyoming.

The Japanese central bank will steer monetary policy while closely monitoring the relationship between labor market conditions, wages and prices, he said.

Ueda said that “expectations of positive inflation began to take hold” in Japan after post-pandemic global inflation provided a “large external shock.”

In addition, wage growth is spreading from large companies to smaller ones, he said.

A falling population is “producing acute labor shortages and persistent upward pressure on wages,” Ueda said.

He said persistent labor shortages are prompting investment in labor-saving technologies, which “has become a key driver of capital spending.”

Ueda said studies point out that many routine tasks, which are performed relatively more often by women and nonregular workers, can be automated by artificial intelligence technology. So far, however, “AI adoption has not generated significant labor market disruption” in Japan, he said.