USD/JPY flows: Labor Cash Earning Remains Below 2%

The May Japan Labor Cash Earning has come in lower than estimates of 2.1% at 1.9% y/y, earning in April has also been revised to 1.6% from 2%. While it continues to point forwards accelerating wage growth, its progress does not allow the BoJ to step too far in the July meeting with bond purchase cut and rate hike. Small Japanese firms are also finding it more difficult to hike wages as they would not be passing the cost to consumers as efficient as larger firms.

USD/JPY is trading 0.12% lower at 160.56.