TOKYO (Reuters) – Toyota Motor said on Wednesday its workers will get the biggest pay rise in 25 years, reinforcing expectations that the bumper pay rises will give the Bank of Japan (BoJ) room to proceed to a key policy change next week.
Toyota, Panasonic, Nippon Steel and Nissan, among Japan’s largest automakers, have agreed to fully meet union demands in annual wage negotiations that end on Wednesday.
These negotiations are being closely monitored this year, because the wage increases should allow the BoJ to end its negative interest rate policy, which has lasted for years, as early as next week.
Toyota, the world’s largest automaker, which is traditionally an indicator of annual negotiations, will accept salary increases of up to 28,440 yen (175.93 euros) per month and record bonus payments.
“We see strong momentum for wage increases,” Yoshimasa Hayashi, Japanese government spokesperson and general cabinet secretary, told reporters.
“It is important that this dynamic of rising wages extends to small and medium-sized businesses,” he added.
The BoJ is also closely monitoring the results, as it is a key data point in deciding when to end negative rates, in force since 2016.
(Reporting by Tetsushi Kajimoto, Daniel Leussink, Maki Shiraki, Sam Nussey, Anton Bridge, Satoshi Sugiyama and Leika Kihara; Lina Golovnya, editing by Kate Entringer)
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