Big firms39; pay hikes spreading to smaller firms, says BOJ
BOJ says more firms passing on rising wage costs
Upbeat view may heighten case for nearterm rate hike

TOKYO, July 8 Reuters The Bank of Japan BOJ said labour shortages are prodding smaller firms to hike wages and pass on rising costs through price increases, signaling confidence the country was making progress toward durably achieving its 2 inflation target.

The optimistic assessment, made in a summary of discussions at the BOJ39;s meeting of regional branch managers, may heighten the case for the central bank to raise interest rates as soon as its next meeting on July 3031.

Many regions reported that big firms39; big pay hikes in this year39;s wage negotiations were spreading to small and mediumsized companies, according to the summary of the BOJ39;s quarterly meeting.

The assessment compared with that of the previous meeting in April, when the BOJ said there were hopeful signs solid wage increases among big companies would spread to smaller firms.

Some smaller regional firms decided to prioritise raising pay to retain or hire workers, even if they were not earning sufficient profits to make up for the higher cost, it said.

Many regions also saw companies passing on rising costs, or considering doing so, particularly those in the services industry, the BOJ said in the summary.

The BOJ said consumption was firm as a whole, with robust spending by inbound tourists making up for soft consumption among…