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Worker shortage gives cause for concern -- and hope

Tight labor market may deliver inflation via wage hikes

The Bank of Japan will be monitoring the coming spring labor talks, hoping for wage increases.

TOKYO -- Japan's growing labor shortage has started constricting the ability of businesses to expand, but some at the Bank of Japan are quietly hoping that a tightening job market may finally make their coveted goal of 2% inflation a reality.

The central bank's latest quarterly Tankan survey numbers, released Wednesday, show that fixed investments by the nonmanufacturing sector fell short of projections despite the gradual economic recovery. As the bank dug into the data to untangle the mystery, it found that the biggest obstacle to capital spending was the crippling labor shortage.

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