Japan sees record minimum wage hike – NHK

Japan is set to experience its largest-ever minimum wage increase as a panel at the labour ministry decided to raise the national average by approximately 5 per cent to 1,054 yen ($6.85) per hour this fiscal year.

This move is seen as a crucial step towards achieving sustainable inflation and facilitating the Bank of Japan’s potential interest rate hike.

The decision comes amid rising living costs and labour shortages. Major Japanese companies have already responded by offering their employees the largest pay raises in decades of 5.1 per cent this year.

While the increased minimum wage aims to boost household purchasing power, it also raises concerns for small businesses struggling to maintain profitability. The final minimum wage for each prefecture will be determined in August, with the new rates taking effect from October.

The government has set an ambitious target of reaching a 1,500 yen minimum wage by the mid-2030s.

This significant wage hike reflects Japan’s efforts to address economic challenges and improve the lives of its workers.

Attribution: NHK and Reuters