Japan's largest business lobby, Keidanren, and trade unions began their annual labor talks today, Wednesday.
- Another round of big wage increases is expected.
- Japanese policymakers are particularly focused on whether these wage increases will extend to smaller businesses.
Big companies have already pledged substantial wage increases, strengthening the case for the Bank of Japan (BOJ) to raise interest rates later this week.
The Japan Center for Economic Research found in a study that
- Large companies are expected to give a salary increase of 4.74% on average – a slight decrease from 5.33% last year, but still a strong gain
Japan's largest union, Rengo, is pushing for at least a 5% wage increase by 2025
- and a 6% target for smaller companies to help reduce the income gap with larger corporations
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The Bank of Japan will meet on January 23 and 245 and improving wage prospects are helping to raise expectations that the Bank will raise its rate.
Bank of Japan Governor Ueda
