Record Wage Hike: Japan's Pay Raises Surge Amid Economic Pressures

Japanese companies have agreed on a 5.46% wage increase this year, marking the highest rise in 34 years, driven by a broad consensus on the need to support workers facing high living costs. Economists remain cautious on whether these raises will significantly boost consumer spending.

For the second consecutive year, Japanese companies have committed to raising wages above 5%, this time securing a 5.46% increase, according to the country's largest union group, Rengo.

There is comprehensive agreement among policymakers, employers, and unions that bolstering wages is vital for workers to manage mounting living costs. This economic strategy is further reinforced by booming corporate profits and labor shortages.

The wage rise trend comes amid skepticism from economists who doubt that these boosts will significantly encourage consumer spending due to continued inflation pressures, evidenced by a 4.0% rise in consumer inflation including food costs in January.

(With inputs from agencies.)