Takaichi Urges Business Lobby to Agree to Above-inflation Pay Hikes in 2026

Prime Minister Sanae Takaichi on Thursday urged Japanese firms to agree to pay raises above inflation in annual wage negotiations next year, as her government pursues "responsible yet aggressive" fiscal policies to spur growth.

"I once again ask business leaders to work toward achieving base pay increases that are not eroded by rising prices," Takaichi, a fiscal dove, told a meeting organized by Japan's most powerful business lobby, known as Keidanren.

Takaichi, who became Japan's first female prime minister in October, aims to boost government revenues without raising taxes to improve consumption at a time when persistently rising prices are outpacing real-wage growth.

Yoshinobu Tsutsui, who heads Keidanren, formally the Japan Business Federation, said at the event that the lobby's members "will work to further entrench strong momentum for wage increases."

Japan's annual "shunto" wage negotiations between management and labor unions are set to begin early next year. Many major corporations in the country close their books in March.