Capital Economics senior Asia-Pacific economist Abhijit Suriya says slower May wage growth is unlikely to deter further Bank of Japan tightening. Preliminary data showed Japan's cash earnings growth slowed to 3.2% YoY in May from 3.6% in April. Suriya said core/base wage indicators remain well above their 2025 average and at historically high levels, and that the print is unlikely to alter the BOJ's view that the labour market remains tight. Capital Economics maintains its forecast that the BOJ

Capital Economics senior Asia-Pacific economist Abhijit Suriya says slower May wage growth is unlikely to deter further Bank of Japan tightening. Preliminary data showed Japan's cash earnings growth slowed to 3.2% YoY in May from 3.6% in April. Suriya said core/base wage indicators remain well above their 2025 average and at historically high levels, and that the print is unlikely to alter the BOJ's view that the labour market remains tight. Capital Economics maintains its forecast that the BOJ will raise rates to 2% by end-2027.