Japanese companies raised wages by 3.89 per cent on average this year, the fastest pace of increase in three decades, according to a survey conducted by Nikkei newspaper that ran on Saturday.
The pace of increase was 1.54 per cent point higher than the previous year, a sign that more companies were hiking pay to compensate employees for the rising cost of living and responding to labour shortages, the Nikkei said.
Small and mid-sized companies raised wages by an average 3.57 per cent, the highest level since comparable data became available 22 years ago, the Nikkei said.
Wage growth holds the key for how soon the Bank of Japan (BOJ) could follow its global counterparts, and raise interest rates from current ultra-low levels.
Japan’s core consumer inflation hit 3.1 per cent in March, well above the BOJ’s 2 per cent target, as companies passed on rising raw material costs to households through price hikes.
The BOJ expects inflation to slow back below 2 per cent later this year as the effect of past rises in fuel and raw material dissipate.
BOJ Governor Kazuo Ueda has said the central bank would maintain ultra-loose policy until wage growh broadens, and becomes durable enough to heighten prospects of sustained achievement of 2 per cent inflation.
The survey was conducted on 308 companies between March 31 and April 20, the Nikkei said.
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