Latest news with #JapaneseTradeUnionConfederation
CNBC
08-07-2025
- Business
- CNBC
Tariffs, declining real wages, slowing growth: Japan's central bank has its work cut out
The Bank of Japan faces a stiff challenge as it strives to normalize its monetary policy at a time when growth has been slowing, while steep U.S. tariffs further threaten the country's exports-driven economy. Declining real wages have compounded the BOJ's troubles. Real wages dropped at their fastest pace in 20 months in May, pressuring the central bank to raise rates and rein in inflation. Data from the country's ministry of health, labor and welfare shows that real wages dropped 2.9% compared to the year before, sharper than the revised 2% fall in April and also marking their fifth straight month of decline. The wage data highlights that inflation is taking a substantial bite out of incomes in Japan, despite sharp salary hikes. Japan's unions secured the highest wage increase since 1991 in this year's spring wage negotiations, with the Japanese Trade Union Confederation, or Rengo, saying last week that its members had received a headline pay bump of 5.25% for the year starting April. However, inflation has continued to run above the Bank of Japan's 2% target for more than three years, with the most recent reading coming in at 3.5%, diluting the net impact of wage hikes. Government data shows that while nominal wages have risen every month since December 2021, real wages have fallen year on year for more than 30 of the 41 months since. The BOJ has long stated that a "virtuous cycle" where higher salaries fuel growth in prices was needed for it to raise rates, but an economic slowdown appears to be constraining the bank's ability to tighten policy. Japan's economy also shrunk for the first time in a year in the first quarter, contracting 0.2% quarter on quarter as exports declined, hitting the trade-dependent economy. Should the BOJ raise rates to curb inflation, or should it continue to hold rates steady to support growth in the Japanese economy in a time of tariff uncertainty? Analysts have mixed views on the BOJ's path forward. Hirofumi Suzuki, Chief FX Strategist at Sumitomo Mitsui Banking Corporation, told CNBC that while's May's decline is "largely temporary," real wages are struggling to grow overall, which could dampen economic expansion as consumption slows. However, he said this slowdown in real wage growth suggests that the strength of the BOJ's "virtuous cycle" is not as robust as expected, and could be a factor in delaying rate hikes. In contrast, Jesper Koll, expert director at Tokyo-based financial services firm Monex Group said inflation rising faster than wages will strengthen BOJ Governor Kazuo Ueda's commitment to hike Japan's policy rate, which will almost immediately boost purchasing power for the man on the street by way of a stronger yen. This is because one-third of the Japan's consumer price index is directly linked to import prices, he said, and a stronger yen will reduce imported inflation. Vishnu Varathan, managing director at Mizuho Securities puts it simply: "The optimal game-plan for the BOJ may be to do nothing. Sitting on its hands to affirm the tightening bias (albeit much further out) as it rides out tariffs uncertainties." The U.S. has threatened to impose 25% tariffs on Japanese imports from Aug 1. Varathan said that the BOJ ought to arguably step back, and not step in: the BOJ probably has no scope for further hikes, due to fears of crimping domestic demand.
NHK
04-07-2025
- Business
- NHK
Japan wage hikes widen; smaller firms miss target
Japan's biggest labor group says average wage increases were higher-than-targeted in spring negotiations, even though small and mid-size companies missed the goal for raises. Average monthly pay went up 5.25 percent based on the 5,100 firms that provided information as of July 1. That's up by 0.15 percentage points from last year, and exceeded the 5 percent target set by the Japanese Trade Union Confederation. But the labor group says companies with fewer than 300 employees raised pay an average of 4.65 percent, missing the federation's 6 percent goal. The group, also known as Rengo, says smaller firms faced sluggish demand as consumer prices rose and they were not able to pass along higher costs. Large Japan firms see record-high summer bonus Meanwhile, the Japan Business Federation, or Keidanren, says summer bonuses at major firms in Japan averaged about 990,000 yen, or roughly 6,800 dollars. That's up 4.37 percent from last year in yen terms, marking an increase for the fourth straight year. The figure was the highest since the federation started the survey under the current method in 1981.
Japan Today
03-07-2025
- Business
- Japan Today
Japan's average pay up over 5% for 2nd year in a row
Japanese companies agreed to raise wages by an average 5.25 percent in this year's spring wage talks, the second straight year to exceed 5 percent, the country's largest labor union said Thursday, although salary growth failed to keep pace with ongoing inflation. The Japanese Trade Union Confederation, also known as Rengo, said its final tally of the results of pay negotiations from over 5,000 member unions found the average monthly wage hike stood at 16,356 yen ($110). The results came a year after wages increased by over 5 percent for the first time in 33 years. But wages among small- and medium-sized firms lagged behind their larger counterparts, rising by an average 4.65 percent, or 12,361 yen. "The scope (of companies) raising wages has expanded, but it's a shame that small to medium-sized firms have failed to reach 5 percent. We were unable to halt the growing gap," said Akira Nidaira, executive director at Rengo. The latest government data also showed real wages falling for the fourth straight month in April, as core consumer prices continued their upward trend. "The difference in profits and corporate resilience became glaringly apparent," said Shinichiro Kobayashi from Mitsubishi UFJ Research and Consulting Co., adding that smaller enterprises may struggle to recruit people because of the gap. Spring negotiation wage hikes had fallen below 3 percent since 1995, but grew to 3.58 percent in 2023. The final tally in 2024 was an average 5.10 percent as a whole, and 4.45 percent among small to medium-sized firms. Meanwhile, summer bonuses for union members in major companies hit a record average 990,848 yen, the highest since the current method of data collection was introduced in 1981, according to preliminary numbers from the Japan Business Federation. The figure rose 4.37 percent compared to the previous year, climbing for the fourth straight year. © KYODO
Japan Today
03-07-2025
- Business
- Japan Today
Japan's average pay up over 5% for 2nd year
Japanese companies agreed to raise wages by an average 5.25 percent in this year's spring wage talks, the second straight year to exceed 5 percent, the country's largest labor union said Thursday, although salary growth failed to keep pace with ongoing inflation. The Japanese Trade Union Confederation, also known as Rengo, said its final tally of the results of pay negotiations from over 5,000 member unions found the average monthly wage hike stood at 16,356 yen ($110). The results came a year after wages increased by over 5 percent for the first time in 33 years. But wages among small- and medium-sized firms lagged behind their larger counterparts, rising by an average 4.65 percent, or 12,361 yen. "The scope (of companies) raising wages has expanded, but it's a shame that small to medium-sized firms have failed to reach 5 percent. We were unable to halt the growing gap," said Akira Nidaira, executive director at Rengo. The latest government data also showed real wages falling for the fourth straight month in April, as core consumer prices continued their upward trend. "The difference in profits and corporate resilience became glaringly apparent," said Shinichiro Kobayashi from Mitsubishi UFJ Research and Consulting Co., adding that smaller enterprises may struggle to recruit people because of the gap. Spring negotiation wage hikes had fallen below 3 percent since 1995, but grew to 3.58 percent in 2023. The final tally in 2024 was an average 5.10 percent as a whole, and 4.45 percent among small to medium-sized firms. Meanwhile, summer bonuses for union members in major companies hit a record average 990,848 yen, the highest since the current method of data collection was introduced in 1981, according to preliminary numbers from the Japan Business Federation. The figure rose 4.37 percent compared to the previous year, climbing for the fourth straight year. © KYODO
The Mainichi
03-07-2025
- Business
- The Mainichi
Japan's average pay ups over 5% for 2nd year in row amid price hikes
TOKYO (Kyodo) -- Japanese companies agreed to raise wages by an average 5.25 percent in this year's spring wage talks, the second straight year to exceed 5 percent, the country's largest labor union said Thursday, although salary growth failed to keep pace with ongoing inflation. The Japanese Trade Union Confederation, also known as Rengo, said its final tally of the results of pay negotiations from over 5,000 member unions found the average monthly wage hike stood at 16,356 yen ($110). The results came a year after wages increased by over 5 percent for the first time in 33 years. But wages among small- and medium-sized firms lagged behind their larger counterparts, rising by an average 4.65 percent, or 12,361 yen. "The scope (of companies) raising wages has expanded, but it's a shame that small to medium-sized firms have failed to reach 5 percent. We were unable to halt the growing gap," said Akira Nidaira, executive director at Rengo. The latest government data also showed real wages falling for the fourth straight month in April, as core consumer prices continued their upward trend. "The difference in profits and corporate resilience became glaringly apparent," said Shinichiro Kobayashi from Mitsubishi UFJ Research and Consulting Co., adding that smaller enterprises may struggle to recruit people because of the gap. Spring negotiation wage hikes had fallen below 3 percent since 1995, but grew to 3.58 percent in 2023. The final tally in 2024 was an average 5.10 percent as a whole, and 4.45 percent among small to medium-sized firms. Meanwhile, summer bonuses for union members in major companies hit a record average 990,848 yen, the highest since the current method of data collection was introduced in 1981, according to preliminary numbers from the Japan Business Federation. The figure rose 4.37 percent compared to the previous year, climbing for the fourth straight year.
