Wage Growth Projections for Japan in 2024

This technical report discusses the anticipated trends in wage growth in Japan for 2024 and beyond, based on recent labor negotiations and economic indicators. It outlines that the wage increase momentum observed in 2023, which reached a significant 3.66% average increase, is expected to recede in the following years. The report attributes the high wage growth in 2023 to a shift in corporate attitudes towards wage revisions in response to record-high inflation. It presents statistical models that estimate future wage increases, predicting a 3.2% increase for 2024 and a further decrease to 2.8% in 2025. The report also highlights that while companies are likely to continue raising wages to retain labor, the influence of inflation on wage growth is expected to diminish. Additionally, it discusses structural changes in the labor market that may affect wage dynamics in the long term, emphasizing the need for collaboration between government and private sectors to ensure sustainable wage increases.