"We see a risk that, if there continues to be hardly any increase in the labor force participation rate of those aged 70 or over, the rate at which labor supply-demand is tightening may increase as many baby boomers leave the labor force when they turn 70," it said. "We think the risk of an unexpected drop in the unemployment rate warrants some degree of caution."
Nomura estimated that the unemployment rate could be depressed by 0.9 percentage point in 2017-2019, adding that if the rate falls to 2.0 percent, it expected hourly wages could rise about 2.5 percent yearly.
In May, the jobless rate was 3.1 percent, seasonally adjusted, unexpectedly rising from April's 2.8 percent.
Nomura said the rise was likely a blip, as the June Tankan survey indicated businesses believed they were facing "stark" labor shortages.
Indeed, on Wednesday, Bank of Japan Deputy Governor Hiroshi Nakaso said in a speech to business leaders in Hiroshima that there were signs some service-sector companies were cutting business hours to avoid hiring more workers, according to a Reuters report.
But Nakaso added that there was a limit to how far operating hours could be cut and that the Tankan survey showed some service-sector companies were leaning toward raising prices to compensate for higher labor costs ahead.
Signs of price rises would likely be welcome news for policymakers as Japan has struggled to reach its 2 percent inflation target, despite the central bank launching a massive quantitative easing program in 2013.
At its meeting last week, the Bank of Japan said it expected inflation to be at 1.1 percent for the current fiscal year, down from its previous forecast of 1.4 percent.
Japan may be the canary in the coal mine for retiring baby boomers and their effect on inflation and wage growth, but many countries are likely to join it soon.
In Europe and North America, one in five people were age 60 or higher in 2015, with that figure expected to rise to 25 percent of the population by 2030, according to a 2015 U.N. report on world population aging.
Globally, one in eight people were age 60 or older in 2015, and that was expected to rise to one in six by 2030, the report said.