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Bank of Japan Signals Possible Rate Hike Amid Wage Growth

8/25/2025

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Summary

Story summary

Bank of Japan Governor Kazuo Ueda reported that wage growth is increasing due to a tight labor market, affecting small and medium enterprises.
He suggested that this trend could prompt another interest rate hike, despite prior concerns about U.S. tariffs.
Ueda highlighted demographic shifts as a factor contributing to labor shortages and rising wages.
Nearly two-thirds of economists anticipate a rate increase later this year.

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Story summary

Bank of Japan Governor Kazuo Ueda reported that wage growth is increasing due to a tight labor market, affecting small and medium enterprises.
He suggested that this trend could prompt another interest rate hike, despite prior concerns about U.S. tariffs.
Ueda highlighted demographic shifts as a factor contributing to labor shortages and rising wages.
Nearly two-thirds of economists anticipate a rate increase later this year.