Inflation of just 2% -- relatively low in the current global wave of surging prices that are eroding incomes -- is likely to be sufficient to turn Japanese workers’ real earnings negative, according to Oxford Economics.
Norihiro Yamaguchi, a senior economist at Oxford, expects consumer prices will rise 1.7% this year, approaching the Bank of Japan’s 2% target. That’s more moderate than many other economies, yet real incomes in Japan will fall faster than France, Australia and other Asian nations because of modest gains in nominal incomes, he said in a research note.
