MNI BRIEF: BOJ Survey Shows Solid Wage Growth For FY26

Japanese wage growth in fiscal 2026 is expected to remain solid, supported by high corporate profits and persistent labour shortages, according to a Bank of Japan survey released Monday.

“It seems that the number of firms expecting a clear improvement in their profits is not large, partly owing to the impact of U.S. tariff hikes; however, most firms appear to consider it necessary to raise wages in fiscal 2026 by as much as in fiscal 2025, or to a similar extent to prevailing wage levels at other firms, in order to retain staff and improve motivation amid ongoing, severe labour shortages,” the BOJ said.

The Bank gathered information on firms’ wage-setting stance for fiscal 2026 relative to fiscal 2025 through interviews with business leaders conducted by its head office and regional branches. Most reports indicated that firms expect to raise wages in fiscal 2026 at roughly the same pace as in fiscal 2025, when wage growth was strong.

Some regional variation was reported, with two branches anticipating higher wage growth and two expecting lower growth than in fiscal 2025.

Wages for part-time employees are being raised in response to relatively strong minimum wage increases in fiscal 2025. Under these conditions, some firms—particularly outside metropolitan areas—reported feeling pressure to raise wages for full-time employees as well, citing concerns over fairness.