Japan¡¯s largest labor union federation will keep seeking at least a 5% wage hike in next year¡¯s pay talks, as new Prime Minister Sanae Takaichi attempts to keep the country¡¯s wage momentum going.
In negotiations starting later this year, Rengo will seek total pay increases of 5% or more, including a 3% rise in base salary, according to goals clarified in its basic policy framework Thursday. A year ago the annual talks began with the same targets, ultimately delivering average gains of 5.25% overall for 2025. The goals will be officially confirmed in late November.
If Japan can¡¯t keep up its wage-hike momentum, that has implications for both Takaichi¡¯s tenure and the central bank¡¯s policy path. As inflation continues to hit households, a lack of real wage growth would likely feed into further discontent among voters, while the Bank of Japan might struggle to maintain its policy tightening path.
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