Japanese companies including Honda and Nippon Steel have granted workers their biggest pay rise in more than three decades, underlining the inflationary trend and bolstering the case for the Bank of Japan to begin raising interest rates.
Galvanised by the sharp rise in living costs and a deepening labour shortage, the country’s trade unions have negotiated an increase in wages that is certain to exceed the rate of inflation, marking a milestone in a country where real wages have stagnated since the late 1990s.
With the shunto spring wage negotiations mostly concluding on Wednesday, economists expect large companies to give their unionised workers an average wage increase of more than 4 per cent, compared with 3.6 per cent last year. That would be the biggest rise since 1992.