Overview

• Major companies agreed to boost base wages by 5.25% for 2025, the biggest annual rise since 1991, the Rengo union federation reported
• Keidanren said average summer bonuses climbed 4.37% to a record ¥990,848 at major firms
• Structural labor shortages and persistent price pressures have created a consensus among employers to sustain pay hikes above inflation
• Economists forecast wage growth near 5% next year, and Mizuho’s Saisuke Sakai expects the BOJ to resume rate increases in early 2026
• The Bank of Japan ended its large-scale stimulus last year and raised short-term rates to 0.5% in January, preparing for further policy normalization