By Leika Kihara

TOKYO (Reuters) – The Financial institution of Japan (BOJ) stated on Monday that wage hikes are spreading to smaller corporations in regional areas as they scramble to retain or rent staff, signaling confidence that pay hikes will maintain inflation durably round its 2% goal.

Many areas in Japan are seeing extra corporations cross on rising prices, or take into account doing so, notably these within the companies trade, the BOJ stated in a abstract of discussions at its quarterly assembly of regional department managers.

“Many regions reported that big firms’ big pay hikes in this year’s wage negotiations were spreading to small and medium-sized companies,” the abstract stated.

Some regional smaller companies determined to prioritise elevating pay to retain or rent staff, even when they weren’t incomes adequate earnings to make up for the upper value, it stated.

The BOJ stated consumption was “firm as a whole,” with strong spending by inbound vacationers making up for delicate consumption amongst households hit by rising dwelling prices.

The central financial institution’s view on wage developments can be amongst key components its board will scrutinise in deciding whether or not to boost rates of interest at its subsequent coverage assembly on July 30-31.