Toyota and other large Japanese firms agreed to raise wages for a fifth straight year after the country's annual labor negotiations, Reuters reported, as central bank policymakers said Prime Minister Shinzo Abe's call for a 3% hike is creating a "positive atmosphere" for boosting pay.
Abe has urged firms to hike wages by at least 3% to help spur consumption and thereby inflation, which remains well below the bank's 2% target.
Toyota Motor Corp.'s union said the Japanese car maker agreed to raise base monthly wages by more than ¥1,300 in the coming year, which is higher than last year's, but below the union demand for a ¥3,000 hike, Reuters reported.
But Toyota, seen as a bellwether of so-called "shunto" or spring wage negotiations between unions and companies, said overall monthly payment for all union members, including raises in base salary for full-time staff and pay for contract workers, would rise by an average 3.3%.
"We have agreed to the increase as we would like to contribute to the country's economic development and its manufacturing culture," Toyota senior managing officer Tatsuro Ueda was quoted by the newswire as saying to reporters.
Automaker Honda Motor Co. Ltd. and information technology firm Hitachi Ltd. said they would raise annual salaries, including bonuses and other benefits, by more than 3% and 4.1%, respectively, Reuters said.
"Wage hikes are regaining momentum, but they are still shy of reaching 3% at most companies ... I doubt companies can sustain wage hikes without government pressure. They must steadily raise wages on their own initiative to revamp business structure and improve their ability to grow," Hisashi Yamada, director at Japan Research Institute, was quoted by Reuters as saying.
Japan's wages fell 0.9% in January from the year-ago period, their steepest decline in six months since a 1.1% annual fall in July 2017.
Bank of Japan board members attributed the "sluggish" wage growth among regular employees to Japanese labor and management placing a high priority on employment stability over wage increases, minutes of the central bank's January policy meeting released on March 14 showed.
But some central bank policymakers pointed out that "a deepening labor shortage had been exerting upward pressure on wages of not only part-time employees but also regular employees, and that an increasing number of firms had been raising the starting salaries of new graduates," the minutes showed.
Some BOJ board members also noted that "the government's call for a 3% increase in wages and announcement of various measures to support this also had been creating a positive atmosphere for wage increases," according to the minutes.
As of March 13, US$1 was equivalent to ¥106.57.
