Additionally, small and medium sized enterprises are facing "really tight labor market conditions," and part-time workers have seen their pay rising "significantly higher" than regular workers in large companies, according to Kuroda.
"So all of this makes our contention more reasonable," he said. "In the sense that labor market tightness has been affecting, initially part time workers and irregular workers, but now regular workers in small and medium sized enterprises are experiencing higher pay increases."
For many years, Japanese corporations have appeared reticent to pay out big raises, but Kuroda explained why he thought that was changing.
"The Japanese corporate sector now enjoys historic high level of profit, better than ever. — even better than during the bubble period — they have huge profit, huge cash to spend," he said. "So Japanese corporate sector has been increasing capital investment, and now, somewhat belatedly, started to increase wages."
"So I think if we continue our fiscal and monetary policy in coming years, if labor market continues to tighten ... if this situation continues, eventually, tight labor market conditions would force wages to rise significantly," Kuroda added.
Although Kuroda said deflation "has gone already" from Japan, he acknowledged that "headline inflation has been quite slow to adjust upward" in part because of weakness in oil prices. More importantly, he said, "Japanese people — businesses as well as labor unions — are accustomed to deflationary situation for 15 years."
"So the mindset is still quite cautious about inflation expectations, but I'm quite sure that with continuous accomodative monetary policy, supported by fiscal policy, we'd be able to eventually raise wages and prices significantly," he said.
Turning to the BoJ's potential exit from its extraordinary policy, Kuroda declined to comment on any specifics.
"Inside the bank, of course, we have various simulations of potential exit strategies and so on and so forth," he said. "But as I said, it's premature to openly discuss exit strategy at this moment when inflation rate is still close to zero — although improving."
Correction: This article has been updated to clarify Bank of Japan Governor Haruhiko Kuroda's comments on deflation being "gone already" from Japan.