The Bank of Japan said that the increase in the number of women and senior workers entering the labor market, and the simplification of operation by automation by firms to keep wages and inflation rises significantly in Japan.
BOJ added that companies and households showed no signs that they would largely accept higher prices because they are accustomed to lower wages and inflation during long periods of deflation.
Also, the Bank of Japan added in its quarterly report that the productivity of Japanese companies is relatively low and there is considerable scope for increased productivity, especially in the non-manufacturing sector, noting that Japan's labor productivity ranges from 60% to 70% of the US level.
The report also noted that while Japan may take longer than expected, inflation will gradually increase toward 2%.
