Japan’s wages and prices have ‘recoupled’ since Covid-19, researcher says

BoJ paper offers new evidence of a stronger link between wage and price inflation in Japan

Japanese banknotes

Wages and prices in Japan decoupled around 1998 but have recoupled to some extent in the post-Covid-19 era, according to a working paper published by the Bank of Japan (BoJ).

Past empirical studies show that the link between wages and prices in Japan broke around the late 1990s, Yoichi Ueno from the BoJ’s research and statistics department says in the paper. This means that wage inflation became a much less important determinant of price inflation in the pre-Covid-19 era.

However, more recent data

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