BOJ Survey Shows Broad Wage Hikes, Rising Price Pressures Across Japan

The Bank of Japan's latest quarterly survey reveals that companies across most regions implemented significant wage increases this year, including small businesses, though some caution that sustaining this trend may prove difficult.

Many regions reported that companies are continuing to raise prices to offset increasing labor and distribution costs. The pass-through of raw material cost increases—driven partly by Middle East tensions—to consumer prices is occurring faster than in the past.

Capital investment plans remain robust, with growing global AI demand boosting orders and investment in chip manufacturing equipment. However, several regions flagged risks of sharp export declines and slightly reduced production.

Companies are also considering further price increases for food and daily consumer goods from this summer. Smaller businesses in particular are struggling to pass on rising input costs, putting pressure on profit margins.