A number of major Japanese firms agreed to solid pay increases on Wednesday as part of this year’s spring wage negotiations, sustaining momentum for hikes in a nation that has for decades struggled with low wage growth.
This year’s annual negotiations, known as shuntō, conclude this month and are being monitored especially closely by policymakers, as developments could be a decisive factor in the Bank of Japan’s decision on whether to adjust its ultraloose monetary policy next week or next month.
Inflation remains at historically high levels and is hindering consumption, so economists say it is critical to see a virtuous cycle of wage increases by large companies with these also spreading to small and midsize enterprises.