Japanese Wage Increases in 2023

TOKYO (Reuters) – Japanese annual pay increases this year must exceed the 5.1% secured last year because real wages continue to fall, the head of the Rengo trade union group told Reuters on Friday.

Rengo is formally seeking wage hikes of at least 5% in this year’s “shunto” wage negotiations. President Tomoko Yoshino stated that the impact of rising prices is making the group focus on securing a result that surpasses last year’s increase, which was the largest in 33 years.

“Even after last year’s wage hikes, I think there are few people who feel their real living conditions have improved,” Yoshino said in an interview.

Rengo has targeted hikes of at least 6% for smaller firms in order to reduce the income disparity with workers at larger companies.

She spoke to Reuters hours before the Bank of Japan was set to announce its latest interest-rate decision on Friday. Traders were almost fully pricing in the chance of a rate hike.