According to Reuters, Toyota has agreed to fully meet union demands in wage negotiations on Wednesday. This agreement marks the largest wage increase in 25 years.
The world's largest automobile manufacturer has agreed to monthly increases of up to 28,440 yen, equivalent to $193 in US dollars.
“While they never present the changes in percentage terms, it looks like we are on the path to more than 3.5% wage growth in the broader Japanese economy given this,” says financial analyst Andreas Steno to Steno Research.
“Toyota furthermore urges suppliers to follow suit, which is what we are yet to see in the Japanese economy.”
The results of the annual wage negotiations are being closely followed by the Bank of Japan (BoJ) as a crucial piece of data, as BoJ policymakers are considering bringing an end to negative interest rates.