Japanese Firms Finalize Wage Hikes in Shunto Talks

Major Japanese companies are finalizing agreements for substantial wage increases as their annual labor negotiations with unions conclude this week, marking the fourth straight year of strong pay growth amid persistent labor shortages.

The talks, known as shunto, typically wrap up around mid-March, with several leading firms set to seal deals on Wednesday. Companies including Toyota Motor and Hitachi are among those completing negotiations, driven by the need to retain workers in a tight job market. Earlier settlements underscore the momentum: Mitsubishi Motors agreed to an average 5.1 percent pay hike on February 25, the earliest conclusion since the company's founding in 1970. Mazda Motor also reached an accord ahead of schedule by fully meeting union demands.

Japan's largest labor federation, Rengo, which represents about 7 million workers, demanded an average increase of 5.94 percent this year, a slight dip from last year's 6.09 percent request. That prior demand yielded a 5.25 percent rise, the biggest in more than three decades, bolstering household incomes and consumer spending. Rengo plans to release its first-round tally of agreements on March 23, with initial signs...