Toyota agrees to biggest wage hike in 25 years in sign of Japan Inc's hefty pay bump
By Tetsushi Kajimoto and Anton Bridge
TOKYO (Reuters) -Toyota Motor agreed to give factory workers their biggest pay increase in 25 years on Wednesday, heightening expectations that bumper pay raises will give the central bank leeway to make a key policy shift next week.
Toyota (NYSE:TM), Panasonic (OTC:PCRFY), Nippon Steel and Nissan (OTC:NSANY) were among some of Japan Inc's biggest names that agreed to fully meet union demands for pay increases at annual wage negotiations that wrap on Wednesday.
The talks, long a defining feature of the usually collaborative relationship between Japanese management and labour, are being closely watched this year as the pay increases are expected to help clear the way for the central bank to end its years-long policy of negative interest rates as early as next week.
Toyota, the world's biggest carmaker and traditionally a bellwether of the annual talks, said it agreed to the demands of monthly pay increases of as much as 28,440 yen ($193) and record bonus payments. Keeping with past practice, the company did not provide a percentage figure for the salary rise.
«We're seeing strong momentum for wage hikes,» Japan's top government spokesperson and chief cabinet secretary, Yoshimasa Hayashi, told reporters. «It's important that the strong wage hike momentum will spread to small and mid-sized firms.»
Economists see substantial wage increases as a prerequisite for the Bank of Japan (BOJ) to declare that its long-held goals of sustainable wage growth and stable prices are in sight and usher in an end to negative rates in place since 2016.
The bank, which has stuck with massive stimulus and ultra-low rates for years longer than other developed countries in an attempt to jumpstart a moribund
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