Japan unions will unveil results of wage talks, presaging shift at central bank

Panasonic Holdings

15/03/2024 02:26

By Tetsushi Kajimoto
       TOKYO, March 15 (Reuters) - Japan's largest trade union
group is due to announce results of this week's annual wage
talks on Friday, with expectations for a rise of more than 4%,
which would be the biggest boost since the early 1990s and
strengthen the case for a central bank shift.
    The Rengo union group will unveil the results on Friday at
around 4:15 p.m. (0715 GMT), officials said, days after Toyota
Motor  7203.T , the bellwether of annual talks, unveiled its
biggest pay increase in 25 years, prompting analysts to raise
pay hike projections to 4% or more. 
    Analysts had previously seen increases at around 3.9% this
year, after last year's 3.6%, itself a three-decade high.
    Rengo represents about 7 million workers, many at large
companies.
     Japanese businesses are facing a chronic labour shortage
due to an ageing and dwindling pool of workers. Prime Minister
Fumio Kishida is pushing companies to raise wages to help Japan
shake off years of deflation. 
    The higher wage hikes are likely to boost expectations the
central bank will end negative interest rates as early as its
next policy setting meeting on March 18-19.
    "Taken together, we can expect hikes to top my forecasts to
reach around 4.5% or closer to 5%," said Yasunari Ueno, chief
market economist at Mizuho Securities. 
    "That should give the Bank of Japan a strong tailwind as the
central bank is expected to remove negative rates policy as
early as in March."
    On Wednesday, Panasonic  6752.T , Nippon Steel  5401.T  and
Nissan  7201.T  were among some of Japan Inc's biggest names
that agreed to fully meet union demands for pay hikes at the
annual wage talks.
    The annual pay negotiations - called "shunto" or "spring
labour offensive" - are one of the defining features of Japanese
business, where relations between labour and management tend to
be more collaborative than in some other countries.

 (Reporting by Tetsushi Kajimoto; Editing by David Dolan and
Jamie Freed)
 ((tetsushi.kajimoto@thomsonreuters.com;))