# Japan Chooses Scarce Labour Over Cheap Labour

Japan's political turn against immigration keeps tightening labour supply in its most inflation-sensitive sectors, so wage and services inflation stay elevated and the Bank of Japan is pushed into more tightening than markets price.

- Conviction: 32 / 100 (weakening)
- 7-day move: -5
- Horizon: Emerging (watchlist)
- Tracking since: 2026-10-01T00:00:00.000Z
- Last updated: 2026-10-12T14:07:12.960Z
- Canonical: https://polylog.news/trends/japan-labor-scarcity-inflation
- Publisher: Polylog
- Affected regions: Global

## Recent score history

- 2026-10-11: 34
- 2026-10-12: 32

## Recent evidence

- [confirms] Japan's real wages rise 1.5% in August, an eighth straight gain that keeps another Bank of Japan hike in play (2026-10-07): Japan's real wages rose 1.5% in August, the eighth straight gain, with base salaries up 3.8%, which keeps an October Bank of Japan hike in play after September's increase. Part of the real-wage gain reflects government relief that lowers measured inflation, so the confirmation is partial.
- [confirms] Bank of Japan prepares to declare that underlying inflation has reached its 2% target (2026-10-06): Sources told Reuters the Bank of Japan may declare in its October 30 outlook report that underlying inflation has reached its 2% target, one month after raising its policy rate to a 31-year high. That would open the way to more tightening, as the thesis expects, and Nidec's yen bonds already trade at the lowest price among more than 3,000 local corporate notes.

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