MNI BRIEF: Wages Rise 5.28% Adding Pressure On BOJ: PRESS

The first wages survey showed an average wage hike of 5.28% this year compared to 2023's 3.80%, indicating the strength of the wage-price virtuous cycle and paving the way for the Bank of Japan to phase out its easy policy, the Nikkei reported.

The survey results are expected to encourage cautious BOJ policymakers that the Japanese economy can achieve the bank’s 2% target and agree to an exit of a large-scale easy policy at the March 18-19 meeting. (See MNI POLICY: BOJ Sees Intact Recovery, Policy Change Ahead)

The average pay hikes in a survey by Japan's largest labour organisation Rengo indicated that the final wage hikes this year will be above 2023's 3.58%. Among them, smaller firms raised wages by 4.42% in the first survey, higher than 3.45% a year before.

In 2023, the final survey of 5,272 unions affiliated with Rengo showed an average pay hike of 3.58%, or ¥10,560 a month, the biggest increase since the 3.9% seen in 1993. Small and midsized firms raised wages by 3.23%, also the fastest pace in three decades.