Bank of Japan Governor Kazuo Ueda told the Federal Reserve’s Jackson Hole symposium on 23 August that Japan’s chronic labour shortages are now forcing companies of all sizes to lift pay, with wage gains spreading beyond major enterprises for a third consecutive year. He said the demographic slide that began in the 1980s has become a key driver of a persistently tight job market, and that, barring a sharp demand shock, the resulting upward pressure on wages is likely to continue. The governor argued that stronger pay packets, rising labour mobility and investment in labour-saving technology are nudging the economy closer to durably meeting the BOJ’s 2% inflation goal. After raising its policy rate to 0.5% in January and pausing in July amid concern over the impact of a 145% U.S. tariff on Chinese goods, Ueda said conditions for resuming rate increases are “falling into place”, while the bank will keep a close watch on wage and employment data. In a separate speech on 28 August, board member Junko Nakagawa said the BOJ will “continue lifting the policy rate” if its growth and price projections are realised, but stressed that each decision will hinge on the latest hard and soft indicators, including the September Tankan survey, which she called “extremely important”. Nakagawa noted that tariff-related uncertainty has “diminished a bit yet remains high” and cautioned that aggressive corporate cost-cutting could slow wage momentum, even as the overall environment for a hike has improved since April.