Japan's Rengo sets 6% midpoint wage goal for 2027 negotiations

Rengo, the biggest labour umbrella group in Japan, unveiled a more aggressive wage-bargaining stance for the 2027 annual negotiations, proposing a 6% midpoint target while keeping 5% as a minimum. The policy, which guides its 7 million member unions, follows three consecutive years of average pay gains above 5% amid tight labour markets. Although the new benchmark signals ambition, analysts expect the final settlements to remain close to the 5% increase recorded in the 2026 round.

Experts caution that pushes beyond this level could fuel a wage-price spiral, complicating the Bank of Japan's effort to hold core inflation near its 2% goal. In addition, Rengo set a long-term objective of raising wages by 15% by 2030 to improve Japan’s standing in international wage rankings. The federation will formalise the 2027 policy in December, with individual unions preparing their demands ahead of the March negotiation deadline.