FX.co ★ Yen Rises Amid Firm Wage Data

The Japanese yen appreciated, surpassing 154 against the dollar on Thursday, as it rebounded from the previous day's losses. This movement was underpinned by consistent wage growth, which bolstered expectations that the Bank of Japan will continue on its monetary tightening trajectory. In September, nominal wages rose by 1.9%, an improvement from the 1.5% increase observed in August, buoyed by stable base pay and a slight uptick in overtime earnings. However, this wage growth fell short of the 3.4% rise in consumer prices, leading to a 1.4% decrease in real wages and marking the ninth successive month of decline. Bank of Japan Governor Kazuo Ueda stated that the wage outlook for 2026 would be critical in determining when to resume tightening, following the central bank's decision to maintain its current policy last week. Concurrently, newly appointed Prime Minister Sanae Takaichi emphasized Japan's ongoing struggle to achieve sustainable inflation driven by strong wage increases, highlighting her administration's cautious approach towards additional rate hikes.