Japan’s tight labour market (2.4% u/e rate!) should be positive for wages, BOJ rate hikes

Japan’s unemployment rate fell in September, and the jobs-to-applicant ratio rose.

• Japan September jobs report: Unemployment rate 2.4% (expected 2.5%)

Good news for the labour market in Japan. And the hot take is that it supports rising wages and hence Bank of Japan rate hikes.

The only niggle is Japan’s unemployment rate is never too far from the rate reported for September. The persistently low unemployment rate never drove up wages before. It took a huge amount of political pressure to get wage rises.

The chart is from the Trading Economics site. The right hand scale is a bit of a ‘chart crime’, but you get the picture. The jobless rate has been more or less stable around 2.7% for years:

This article was written by Eamonn Sheridan at www.forexlive.com.