The Week In Hindsight, 02 May 2014
Last week saw average earnings figures highlight worker pay increasing by nearly 1% throughout April, relative to the same period a year before, which bodes well for the Japanese economic outlook. This provides an encouraging sign that some employers may have been confident enough to raise wages in response to the sales tax increase the took place at the beginning of the month.
Given the overall positive outlook in terms of economic data, the BOJ announced no change to the monetary policy framework last week. The policy setting committee did concede that consumption within the economy throughout the second quarter was likely to fall as a result of the consumption tax increase but reasserted that it remains ready to act should the economic outlook deteriorate from here.
However, the current policy maker outlook sees growth progressing in line with forecasts while inflation is expected to continue to pick up toward the central bank target over the remainder of the year.