The results of the Japanese "Shunto" are gradually being released: TM ADR US fully meets the union's wage demands.

On March 13, the results of Japan's "Shunto" have been gradually announced. TM ADR US was the first to disclose the negotiation results of "Shunto", stating that they will fully meet the union's demands for wages and bonuses, marking the fourth consecutive year of meeting salary increase demands.

In this year's labor negotiations, TM ADR US employees' bonuses will increase from 6.7 months' salary in the previous year to 7.6 months' salary, surpassing the previous highest level of 7.2 months, making it the highest annual bonus ever. Depending on the position, TM ADR US employees will see a maximum monthly salary increase of 28,440 yen (approximately 1386.87 yuan).

The specific salary increase amount and percentage for all TM ADR US employees have not been disclosed yet. Previously reported, the union demanded a significant increase in average wage growth compared to last year, which had already reached the highest level since 1999. With the automotive industry employing 5.5 million people in Japan, the salary increases at TM ADR US and other car manufacturers are seen as a benchmark for wage negotiations.

Japanese steel giant, Japan Steel Corporation, announced a 14.2% salary increase including regular raises.

The Japan industry union "JAM", mainly representing small and medium-sized manufacturing companies, reached a 5.32% wage increase agreement. Chief Cabinet Secretary Yoshihide Suga pointed out that wage increases spreading to small and medium-sized enterprises are crucial.

After the reports were released, both the Nikkei 225 Index and the TOPIX Index turned downward.

The yen's rise expanded, with the yen slightly rising against the US dollar, reaching a high of 147.26.

The most important "Shunto" in thirty years is about to be announced.

The preliminary results of this year's "Shunto" negotiations will also be announced on March 15 (Friday), just two trading days before the Bank of Japan's March monetary policy meeting, potentially becoming a significant marginal variable affecting the meeting.

Currently, both labor parties are optimistic about the "Shunto" results, and the government also welcomes the wage increases. On March 7, Rengo released an average union wage increase request of 5.9%, significantly higher than last year's 4.5%, marking the highest level in thirty years.

The market expects that the wage growth rate for the 2024 "Shunto" may far exceed the 3.6% in 2023, reaching 4.3%, the highest increase since 1994. Wage growth prospects will be a key factor for the Bank of Japan to assess inflation trends. According to UBS forecasts, if wage increases are substantial, the probability of Japan structurally moving out of deflation will further increase, expected to boost service price inflation, support real consumption recovery, and further support the Bank of Japan's policy shift. Analysts generally believe that as the Bank of Japan approaches tightening, the narrowing of the US-Japan interest rate spread, the significant undervaluation of the yen, and the resurgence of hedging demand are driving the yen into a new era of appreciation.

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