[Japanese Wages Rise Over 5% for Third Consecutive Year, Supporting Bank of Japan's Interest Rate Hike Path] Rengo, Japan's largest labor union, said on Friday that Japanese companies have agreed to wage increases of over 5% for the third consecutive year, indicating that sustained wage growth is gradually becoming a stabilizing trend supporting the world's fourth-largest economy. The union, with 7 million members, said the final results of the annual labor-management negotiations showed that Japanese companies agreed to an average wage increase of 5.01% this year. The average wage increase for Japanese companies was 5.25% last year and 5.10% the year before. Kazutaka Maeda, an economist at Meiji Yasuda Research Institute, said that the positive results of the labor-management negotiations, coupled with the recent positive turn in real wage growth, "should boost consumer spending and strengthen the case for the Bank of Japan to continue its gradual interest rate hike path." Analysts expect that robust corporate profits and a severe labor shortage will maintain the upward trend in wages, with many predicting similar wage increases next year.
