A worker from Japanese auto giant Toyota Motor Corporation assembles auto parts for the newly designed Crown at Toyota’s Motomachi plant near Nagoya, central Japan, on July 30, 2018. Some of Japan’s biggest companies are expected to formally propose big pay increases in annual negotiations. The union will end on Wednesday, clearing the way for the central bank to end negative interest rates as early as next week.
Yoshikazu Tsuno | Gamma-rapho | Getty Images
Toyota Motor Corp has agreed to fully meet union demands for an annual wage increase, the Mainichi Shimbun said on Wednesday, as Japan’s top companies are likely to demand steep raises in annual negotiations with the union.
The wage talks that ended on Wednesday have long been a feature of Japanese companies, where relations between unions and management tend to be more collaborative than in other countries.
This year’s negotiations are being closely watched as big wage hikes are expected to help clear the way for the central bank to end years of negative interest rates as early as next week.
toyotaThe Daily News said the company, the world’s largest automaker and traditionally the leader in annual negotiations, agreed to meet workers’ demands. Toyota employees are demanding monthly pay increases of up to 28,440 yen ($193) and record bonus payments.
A Toyota spokesman said the information was not released by the company. Toyota is expected to provide an update on the outcome of the negotiations later Wednesday morning.
Rival Nissan says it fully agrees with the union’s wage demands, as do steelmakers Nippon Steel.
Economists believe that substantial wage growth is a prerequisite for the Bank of Japan to announce that its long-term goals of sustainable wage growth and price stability are about to be achieved and to end the negative interest rates implemented since 2016.
The bank, which has held on to massive stimulus and ultra-low interest rates for years longer than other developed countries in an attempt to revive moribund economies, is scheduled to hold its next policy-setting meeting on March 18-19.
According to Rengo, Japan’s largest labor union, workers at large companies are demanding an annual salary increase of 5.85%, exceeding 5% for the first time in 30 years. As a result, some analysts expect wage increases this year to be 5% or more, compared with previous increases of just under 4%. This would be the largest increase in approximately 31 years.
Unions in industries including automobiles, electronics, metals, heavy machinery and services are demanding big pay increases.
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