"Japan's Historic Wage Surge: Impact and Implications"

Japan's annual "shunto" spring wage negotiations have seen major corporations, including Toyota, agreeing to significant pay increases for workers, with some exceeding union requests. The outcome of these negotiations is expected to influence the Bank of Japan's decision on when to exit its negative interest rate policy. The increase in wages is seen as crucial for stimulating consumer spending and lifting prices, potentially prompting a shift in monetary policy. However, concerns remain about stagnant wages, part-time employment, and the impact of recent inflation on domestic demand and private consumption. All eyes are now on small and medium businesses, with speculation about a potential policy shift in March or April.