While there are some areas where wages are rising very quickly in Australia, aggregate growth in wages has not responded materially to the higher inflation and is not inconsistent with inflation returning to target over time.
The potential impact of the earthquake and its aftermath on both the Japanese economy and the world economy is something we will be thinking about deeply in the coming days and discussing with our friends at the Bank of Japan. For the moment, my heartfelt thoughts are with the people of Japan, whose lives and whose livelihoods have seen such havoc.