Japan's wage hikes create game-changing inflation dynamic as BOJ meets

TOKYO -- Last week's paradigm shift -- big Japanese corporations promising record pay raises -- has lifted hopes that the country's ever-cautious employers have finally stopped economizing on salaries. The new dynamic came after three decades of low inflation and nominal wage growth, and days before a Bank of Japan policy meeting at which a possible overhaul is now firmly on the table.

About a month ago, 17% of market players and economists expected the central bank to shift its policy in the meeting starting Monday. That figure this month raced past 50%, according to a Nikkei survey, as optimism mounted that the corporate promises would bring wage growth higher than inflation.