The Bank of Japan's whispers were drowned out by the rowdy selloff

The yen hit a fresh 34-year low as markets focused on the BOJ's decision on Friday to keep interest rates around zero. A lack of signals from Governor Kazuo Ueda that the currency's falls may quicken the timing of the next rate hike. BOJ watchers say the central bank's quarterly report and comments from Ueda clearly suggest consecutive rate hikes are on the table.

Japanese service prices are rising and bumper pay hikes offered by firms will boost household income later this year, the Bank of Japan said, underscoring its conviction the economy is making progress towards sustainably achieving its 2% inflation target. The outcome of this year's strong wage negotiations will boost salaries around summer and underpin consumption, the BOJ said in a full version of its quarterly outlook report, adding that household spending is expected to gradually increase. "Companies' positive wage- and price-setting behaviour is broadening," with labour shortages pushing up wages and prodding more firms to pass on higher costs through hikes in service prices, the report said on Tuesday.