Analysis has suggested that if the yen-dollar exchange rate rises to 170 yen due to the depreciation of the yen, Japanese import prices will soar 13.5% and real wages reflecting prices will remain in negative territory.
According to Nikkei, the Meiji Yasuda Research Institute predicted that if the yen-dollar exchange rate is 170 yen, the inflation rate used to calculate real wages will rise to 3.4%, exceeding the rate of wage growth expected to be less than 3.4%.
The organization observed that if the yen-dollar exchange rate is 160 yen, the import price inflation rate will hit 8.7% and real wages will turn positive after October this year.
Nikkei pointed out that if the yen-dollar exchange rate rises, the price of imported goods will also rise, delaying the time when real wages turn positive, and weakening the effect of the reduction in residence tax and tax income that the Japanese government will implement in June.
Meanwhile, Nikkei reported that as a result of a survey of 10 private economic experts, Japan’s real gross domestic product and GDP growth rate from January to March this year are expected to record negative numbers for the first time in two quarters.
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