Japanese firms are increasingly boosting starting pay for young employees, potentially building longer-term momentum for overall wage growth in a welcome development for the Bank of Japan as it seeks evidence of a virtuous wage-price cycle.
Companies including Dai-Ichi Life Holdings and Nomura Holdings have announced plans to raise wages for younger staff by 16%. Some firms are going even further, with Tokyo Electron boosting starting salaries by 40% and Asics pledging to raise pay for incoming college grads by 24%. The figures are all well above average salary gains and inflation in Japan.
The positive news on pay comes as annual wage negotiations have kicked into high gear. If wage gain momentum carries over into this year, the BOJ is expected to end the world’s last negative interest rate regime by April, according to a majority of economists surveyed in January by Bloomberg.