Japan: Unions Raise Wages 3.8% – 30-Year Record Rate

The “shunto”, the annual wage negotiations in Japan between the unions and employersbrought increase in wages against 3.8% average. This is a record percentage here 30 yearsaccording to preliminary results announced today by the Rengo trade union confederation.

This result for the next fiscal year 2023/24 (which starts on April 1) is clearly above economists’ expectations. Potentially, it could encourage her Bank of Japan (BoJ) to moderate its monetary policy, which is always very accommodative.

For over two decades in Japan, wages rose very little each yearas unions preferred to emphasize job security rather than wage claims.

But, since last year, inflation it also reached Japan, under the influence, mainly, of the surge in energy prices, and climbed to 4.2% out of fresh produce in January, a level not seen since 1981.

The next step for business

The Prime Minister’s Government Fumio Kishida he also appealed to Japanese businesses to give wage increases in order to minimize the effect of inflation in purchasing power. Japanese consumers are also suffering the consequences of its fall Gen from last year.

The preliminary results of the “shunto» concern wage negotiations in large Japanese companies.

The big question is whether the small and medium companies in the country, which make up 70% of the assets, will follow the move, since in general, from the large groups, they are less able to absorb the increase of their cost to their selling prices.