Overview

• A Labour Ministry advisory panel proposed raising the national average minimum wage by 6% to ¥1,118 per hour, marking the largest statutory boost since 2002.
• The hike aims to restore real purchasing power after more than two years of real-wage declines under sustained inflation.
• The recommendation follows electoral setbacks for Prime Minister Shigeru Ishiba’s coalition and growing demands for stronger pay growth.
• Small businesses that employ around 70% of Japan’s workforce face challenges absorbing the higher labor costs imposed by the steep increase.
• Regional councils will adjust local minimum wages from October, lifting Japan’s average rate above South Korea’s for the first time in two years.