In addition, the distribution of firms' forecasts for prices, or inflation expectations, has shifted somewhat in the direction of price rises. The third point concerns firms' wage-setting stance (Chart 9). In achieving the price stability target, it is very important that this be accompanied by an increase in wages.
It is noteworthy that, whereas firms' sense of labor shortage temporarily weakened during the early stage of the pandemic, it has intensified again amid the pick-up in the economy, already reaching the pre-pandemic level. Moreover, in predicting developments in wages for the time being, the annual labor-management wage negotiations this spring will be a major key.