Capital Economics has indicated that sustained robust wage growth gives the Bank of Japan the green light to reinstate its monetary tightening policy this month. Preliminary estimates show that workers' cash earnings accelerated in April. Economist Abhijit Surya noted that this acceleration reflects increases in bonuses and overtime pay, while growth in regular earnings remains at its strongest pace in over three decades. While an alternative measure emphasized by the BOJ shows a slight deceleration in base wage growth, that pace is still notably stronger than last year's average. With the unemployment rate at low levels and companies reporting labor shortages, wage pressures are likely to remain elevated. Moreover, as Governor Kazuo Ueda has stated, these shortages should support a "moderate rise" in wages and prices through their interaction. In the view of Capital Economics, a 25-basis-point rate hike this month is almost a certainty.