Major electronics firms and carmakers offered workers smaller base pay increases during this year’s spring wage negotiations than they did last year. (See Chart.) Only a small share of firms participate in the so- called shunto, and the results of the negotiations only provide a benchmark for wage setting. But the less generous offer matches broader signs that wage growth is weakening. Regular earnings growth fell to just 0.6% y/y in January, an eleven-month low. With activity data deteriorating and signs that the labour market may be turning the corner, wage growth could be even slower this year.
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