Major Japanese companies agreed to increase monthly wages by more than 5 percent for the third consecutive year in 2026, the country’s largest business lobby said Tuesday, reflecting solid corporate earnings and efforts to address labor shortages.
The Japan Business Federation said its final tally of results of pay negotiations this year from 146 member companies with 500 employees or more found the average wage increase was 5.37 percent.
The companies offered a wage increase of an average 19,752 yen ($125), the highest since the current method of data collection was introduced in 1976, said the federation, known as Keidanren.
The result marks the first time wage hikes have exceeded 5 percent for three consecutive years since 1989 through 1991.
“Despite major risks such as the crisis in the Middle East, we hope companies will further solidify the strong momentum of wage increases,” a Keidanren official said.
Analysts expect major Japanese companies to post record net profits for the sixth straight year in the current fiscal year, led by a solid technology sector benefiting from booming demand for artificial intelligence.
By industry, the information and communications sector — with its efforts to secure and retain digital talent — had the highest wage growth rate at 8.28 percent.
The printing industry was at 6.81 percent, followed by construction at 6.76 percent.
The highest wage increase was 37,727 yen in the construction sector, which continues to suffer from chronic labor shortages.
