Japan's biggest business lobby, Keidanren, and trade unions kicked off annual labor talks on Wednesday that may pave the way for the central bank to exit its decadelong superloose monetary policy.
The talks come a day after the Bank of Japan took a hawkish turn in policy even as it maintained its accommodative monetary settings, with markets increasingly betting on a shift towards normalizing rates in March or April.
Japan's big firms are expected to offer their unions wage hikes of 3.85% on average this year, the highest wage increase in 31 years, according to a poll of 37 economists conducted between Dec. 25 and Jan. 9 by Japan Center for Economic Research, a private think tank.