Japanese companies have agreed to raise pay by 5.20% on average this year, the biggest in 33 years, the country's largest union group Rengo said on Thursday, wrapping up its fourth tally of the 2024 labour talks.
The outcome of the "shunto" labour offensive is a barometer for spending and durable inflation, and a key factor the central bank gauges to decide on next steps, after its landmark decision in March to end negative rates.
"The tide of wage hikes is firmly in place," Rengo said in a statement. The raises were the biggest for the fourth round, for which it began compiling comparable data in 2013, it said.
Bank of Japan Governor Kazuo Ueda has said sustained wage growth and inflation are crucial for normalising monetary policy, while Prime Minister Fumio Kishida has also expressed hopes that generous pay hikes would put a decisive end to more than two decades of deflation.
Results of the closely watched pay talks are announced in several stages, led by blue-chip firms in March and followed by small firms concluding talks around the middle of the year.
The first round of talks produced a pay raise of 5.28%, a 33-year high, with the pace of raises inching down as more firms join the tally. The third round ended with an average 5.24% raise cumulatively.
A separate corporate survey by credit research firm Teikoku Databank found that 77% of the 1,050 respondents raised wages this year. Two-thirds of those offered hikes short of the 5% demanded by Rengo.
