TOKYO, March 18 (Reuters) – Many major companies are set to offer big pay hikes as they wrap up their annual wage talks with unions on Wednesday, reflecting strong pay momentum for a fourth consecutive year, although uncertainty from the Middle East conflict clouds the outlook.
The ongoing wage talks have been largely insulated from the impact of higher U.S. tariffs, as companies are eager to reward workers with generous pay increases to retain them amid persistent labour shortages.
Attention is now shifting to whether Japan can sustain strong wage growth beyond this year, as surging oil prices triggered by the Middle East conflict could slow the economy and erode corporate profits.
Annual wage talks between management and labour unions typically conclude around mid-March at major firms, with many, including Toyota Motor and Hitachi, finalising their negotiations on Wednesday.
Some companies, such as Mazda Motor and Mitsubishi Motors, have already wrapped up their wage talks well ahead of schedule after quickly agreeing to meet union demands in full.
Mitsubishi Motors agreed to an average 5.1% pay hike on February 25, concluding its annual labour talks at the earliest point since its founding in 1970.
Rengo, Japan’s largest labour union umbrella group with about 7 million members, will release a first-round tally of agreed terms on March 23.
Its unions are seeking an average hike of 5.94%, slightly below last year’s demand of 6.09%, which resulted in an average pay raise of 5.25%, the largest increase in 34 years.
(Reporting by Makiko Yamazaki; Editing by Sam Holmes)
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