Every spring, unions at Japan's large employers negotiate pay at roughly the same time, so that settlements at the biggest names set a benchmark for everyone else. Large manufacturers usually answer union demands on a single day in mid-March. Rengo, the Japanese Trade Union Confederation, publishes running tallies through the spring and a final figure in early July.
The headline figure combines two things: the automatic increase employees get for another year of service (the regular increase) and the increase to the pay scale itself (the base-up). Only the base-up raises pay for the whole workforce.
After decades of settlements near 2%, the numbers changed. Rengo's final tallies were 5.10% in 2024, 5.25% in 2025 and 5.01% in 2026. In 2026 smaller unions averaged 4.69%, short of Rengo's 6% target for them.
What it means for a foreign employer
- It resets the market for your people, unionised or not. Most foreign companies in Japan have no union, but their employees read the shunto headlines. A pay review well below the shunto number now reads as a pay cut in real terms.
- It moves salary expectations in hiring. Candidates at large Japanese companies have had three years of increases above 5%. Offers benchmarked on last year's data will look light.
- It is not your merit budget. The headline includes the regular service-based increase. Compare your budget with the base-up portion, not the whole figure.
Sources
- Japanese Trade Union Confederation (Rengo), final shunto tallies for 2024, 2025 and 2026, reported by Jiji Press and The Japan Times, July 2026.