Japan's labor market to show signs of tightening

Japan's labor market signaled further tightening in October, putting pressure on wages, as data for October revealed. 

Last month, the job-to-applicant ratio hit 1.35. In other words, there were 135 job openings per 100 candidates. The Labor Ministry of Japan said the ratio is higher than the level of 1.34 recorded in September. Thus, the economists' predictions on job openings and applicants were fully justified.

In order to shift the Bank of Japan's (BOJ) monetary easing course, a further strengthening of the labor market is required. It is possible if businesses increase wages, i.e. a move that should be implemented at a faster pace than previously anticipated. 

The government has also taken steps to push up salaries in the country. For instance, in September, Japanese Prime Minister Fumio Kishida announced a 71.6 trillion yen economic stimulus package. The program is expected to cover wage rises, along with a set of anti-inflationary measures. 

As noted by Yuki Masujima, an expert at Bloomberg Economics, Japan's labor market is not as robust as anticipated due to the rising ratio of jobs to applicants in October. Meanwhile, shadow unemployment, meaning those who were employed but did not actually work, turned out to be higher than economists predicted.