Employers and the Rengo union in Japan have agreed to a 5.24% wage hike for 2024. This increase is the largest in decades and represents a significant step in the fight against deflation and stimulating the economy.
The government and the central bank see wage growth as a key factor in reviving the Japanese economy. Prime Minister Fumio Kishida hopes that this increase will help Japan overcome deflation, which has lasted for more than two decades. Bank of Japan President Kazuo Ueda sees sustainable wage and inflation growth as a path to reducing monetary stimulus.
Wage negotiations in Japan are conducted in several rounds. The first results were released in mid-March and show a slight decline compared to preliminary estimates. The pace of wage growth is expected to stabilize later in the year.
The Bank of Japan ended the era of negative interest rates last month. This historic decision was justified by rising wages and inflation, which has climbed above 4% in Japan.
The wage increase in Japan is a positive signal for the entire global economy. It shows that even countries with low inflation and stagnant prices can achieve wage growth and stimulate economic growth.
