Wage talks wrap up March 13, initial estimate due out March 15
Economists expect 2024 pay hikes to hit 31year high of 3.9
Still wage growth not strong enough to turn around real wages
Wage talks seen as decisive factor for end to negative rates

TOKYO, March 8 Reuters Big Japanese companies look set to formally offer hefty pay hikes at annual wage talks with unions that wrap up on March 13, a move that will virtually cement the case for the central bank to phase out its unprecedented monetary easing in coming months.

Economists see the wage negotiations resulting in an average increase of around 3.9 in annual pay for union workers at major firms. That would be the biggest rise in 31 years and heighten expectations the BOJ would end negative interest rates by April.

The central bank has long contended that robust wage growth was a prerequisite for rolling back more than a decade of a radical monetary experiment that has aimed to lift Japan out of a protracted cycle of deflation and economic stagnation.

The annual shunto negotiations, long a defining feature of Japanese business, were closely watched in the high growth era, but became less important in the decades after the asset bubble burst in the early 1990s, as companies scrambled to shed the three excesses of debt, workers, plant and equipment.

Three decades on, wage negotiations are once again in the spotlight, as Prime Minister Fumio Kishida has made pay increases a top priority, as he looks to put an end to…