Japan’s Labor Cash Earnings rise faster than expected to 2.1% YoY versus 1.7% forecast

Japan’s Labor Cash Earnings rose 2.1% YoY through April, rising above the forecast 1.7%, with the previous period’s cash earnings also getting revised higher to 1.0% from the inital print of 0.6%.

Rising labor earnings improve the Japanese inflation outlook. The Bank of Japan (BoJ) has been stubbornly entrenched in hyper-easy monetary policy as the Japanese central bank fears a future return to a disinflationary envirnoment. With labor cash earnings rising faster than expected, it will add pressure to the BoJ to start clamping down on an easy monetary policy stance that has undercut the Yen across the board through 2024. The rate differential between the Yen and all other global currencies has left the Yen struggling across the board.