Japan's biggest business lobby Keidanren plans to urge major corporations to consider wage increases with "enthusiasm and determination stronger than this year," a draft guideline for the annual wage negotiations showed Monday, signaling its intention to seek pay hikes of over 4 percent.
The average pay hike at major member firms this year stood at 3.99 percent, the highest in 31 years. The draft guideline did not include any numerical goals for the increase, but defined 2024 as "an extremely important year to attain sustainable wage growth."
The move came after Masakazu Tokura, head of the Japan Business Federation, expressed expectations of seeing pay hikes exceeding 4 percent next year during a press conference in September.
As Russia's war on Ukraine and the weak yen are pushing up the cost of everything from gasoline to food, momentum toward hiking wages is finally growing in Japan, where consumers have become accustomed to a long period of deflation.
The Japanese government has been asking businesses to raise wages at a pace that exceeds the inflation rate and help sustain the economy.
Rengo, Japan's largest labor organization, said in October it would demand a pay hike of at least 5 percent in the next shunto negotiations, a stronger expression than the "around 5 percent" target it aimed for this year.
According to the Keidanren draft guideline, pay-scale increases should be considered as "an important option" in addition to regular pay raises at a time of rising prices, and contributing to structural wage hikes is the responsibility of companies and Keidanren.
The business lobby is also expected to call on the government and the Bank of Japan to steer monetary policy toward realizing an appropriate level of inflation.
The guideline also said wage hikes at small and medium-sized businesses, which employ nearly 70 percent of workers in Japan, are essential to build momentum toward increasing pay across the country.
