On March 15, the Japanese Trade Union Confederation - Rengo announced that Japan's largest companies have agreed to increase wages for workers by 5.28%. This is the highest wage increase in the past 33 years in this country.
Analysts say the move is a sign that companies are moving away from the deflationary mindset that led to the country’s stagnant economic growth, often referred to as the “lost decades.” Because of deflation, many Japanese companies for the past three decades have offered pay raises based on seniority, tied to the number of years an employee has worked at the company. The current wave of wage increases is much stronger, including increases regardless of seniority.
According to Kyodo, the decision to raise wages will likely prompt the Bank of Japan to end its eight-year negative interest rate policy at its meeting on March 18 and 19.
KHANH HUNG
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