BUSINESS-ECONOMY
The record-high increase in base salary for regular workers in Japan is proof that the economy is showing signs of improvement. This is fuelling market expectations of a rate hike from the Bank of Japan. The increase in wages is in response to weak household spending. According to Friday's report by the labour ministry, full-time workers' base pay rose 2.8 per cent from a year ago. This is the largest growth for similar data going back to 1994. Regular worker's wages are a more reliable indicator of salary trends. This does not include incentives or overtime and so does not suffer from sampling errors. However, earnings in actual currency did not change, which was a first in three months and better than what economists had predicted. Market players are keeping an eye on pay patterns to predict when the Bank of Japan will hike interest rates next. Pay changes are a major factor in attaining a good economic development cycle. The outcome had little effect on the value of the yen. Whether a rate hike by the central bank occurs in December or January is still a matter of debate among economists and market participants. The next policy decision from the central bank is expected on December 19th. The chief Japan economist at JP-Morgan securities, Ayako Fujita, predicts a rate hike in December. Fujita said, "We can judge that data so far has been on track and supports a BOJ rate hike though the bank will also consider other data including data from the US." None
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