Japanese companies agreed on biggest wage hike in 33 years, union group says

A group of Japanese firms have agreed to raise wages by 5.24 per cent this year, the country's largest union group Rengo said on Thursday. The third announcement on the outcome of annual pay negotiations compared with the second survey of 5.25 per cent and initial outcome of 5.28 per cent last month, still the biggest rise since 1991 when it logged 5.66 per cent. The results of the closely watched pay talks are announced in several stages, starting with blue-chip firms in mid-March.

The average growth of pay hikes tends to shrink from the initial round as an increasing number of smaller firms wrap up negotiations towards the April-June quarter. The next survey result is scheduled to be released on April 18. Prime Minister Fumio Kishida is counting on high wage growth to pull Japan out of more than two decades of deflation while Bank of Japan Governor Kazuo Ueda stresses sustained wage growth and inflation as crucial for a further pullback from massive monetary stimulus.