The Bank conceptually divides this mechanism into two steps. First, the output gap improves in line with economic expansion, which will raise actual prices by making firms' wage- and price-setting stance more proactive. Second, as actual prices increase, firms' and households' medium- to long-term inflation expectations rise, which will further push up the actual inflation rate.
As for the first step, the improvement in the output gap is steadily pushing up wages and prices. In terms of wages, those of not only part-time but also full-time employees are rising against the backdrop of tightening labor market conditions.