Fed likely to begin QE taper in September

In most advanced western economies the supply of labour is likely to be boosted by a rise in labour market participation during the coming year or two. This should help to prevent wage inflation picking up and thereby support the case for continued loose monetary policy. However, in Japan, which urgently needs to increase its labour supply in order to lift its trend growth rate, we doubt that the government’s attempts to increase female participation will have much impact in the near term.