Japan’s annual wage negotiations concluded with the largest pay increase in 34 years, according to the final tally released by the country’s biggest labor union group, an outcome that supports the central bank’s view that a cycle of higher wages and prices is emerging.
Workers at 5,162 companies affiliated with Rengo secured an average wage increase of 5.25% in this year’s negotiations, according to the final update of pay deals announced by the trade union federation on Thursday. While the figure came in lower than the preliminary 5.46% reported in March, it still marks the highest growth rate since 1991. Rengo represents approximately 7 million workers, or around 10% of Japan’s labor force.
Robust wage gains help back the case for the Bank of Japan to raise interest rates further, as the central bank weighs the appropriate timing of its next move amid global economic uncertainty. Gov. Kazuo Ueda has recently signaled a cautious stance due to a lack of clarity over U.S. President Donald Trump’s trade policies, emphasizing the need to closely monitor data.
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