Economic and Labor Situation in Japan, January 2026

5% Wage Hike in the Shunto a Shared Goal for Labor and Management

At a New Year press conference on the 5th, Tomoko Yoshino, President of RENGO (the Japanese Trade Union Confederation), said of wage increases in the 2026 Spring labor–management negotiations (Shunto): “We are keenly aware that this is a critical moment to entrench wage hikes, and we will pursue negotiations to the fullest extent possible across all affiliated unions.” Wage increase rates exceeded 5% in both 2024 and 2025, and RENGO aims to achieve the same level again in 2026. The overall target wage increase rate for this Shunto is set at 5% or higher. To address disparities, RENGO has separately set targets of 6% or more for small and medium-sized enterprises, and 7% for union members working shorter hours, such as part-time and contract employees.
Meanwhile, Japan’s three major economic organizations, including Keidanren (the Japan Business Federation), held a New Year reception on the 6th attended by corporate leaders. Ahead of the 2026 Spring labor–management negotiations, a succession of executives expressed their intention to implement wage increases exceeding 5%.
“2026 will be a year aimed at a true escape from deflation. We want to position base pay increases as the standard in wage negotiations,” Keidanren Chairman Yoshinobu Tsutsui emphasized at a press conference after the event, signaling strong enthusiasm for realizing high-level wage hikes.
Atsushi Nakajima, President of Mitsubishi Estate, stated, “To secure talent, we are considering wage increases in 2026 at nearly 10%, roughly in line with the previous year.” Ryuichiro Nishiyama, President of Seibu Holdings, which implemented an 8% wage increase in 2025, said, “Our policy for 2026 is to maintain a level similar to last year.” Tatsuya Shimmura, President of Shimizu Corporation, noted, “We are considering implementing wage increases at around the same level as last year’s 6.3%, or even higher.” Junro Ito, Chairman of Seven & I Holdings, said, “We are considering wage increases comparable to last year (around 5%).” Kentaro Okuda, President of Nomura Securities, commented, “We are considering a target of a 5% increase, in line with previous years. To attract good talent and encourage them to stay for the long term, we want to ensure solid wage increases.” Akihiko Ogino, President of Daiwa Securities Group, also declared, “We aim for a 5% wage increase.”

Labour Force Survey Monthly Results¹

(1) The number of employed persons in November 2025 was 68.62 million, an increase of 480,000 over the same month the previous year. By gender, this included 37.00 million men, down 40,000, and 31.62 million women, up 520,000 over the previous year, the highest level since comparable data became available in January 1953.

(2) Unemployment
The number of unemployed persons in November 2025 was 1.71 million, up 70,000 from the same month in the previous year.
The seasonally adjusted unemployment rate in November was 2.6%, unchanged for the fourth consecutive month, marking the highest level in 16 months, as labour market conditions remained tight. The unemployment rate was 2.9% for men, up 0.1 points, and 2.2% for women, down 0.2 points from the previous month.

Units: 10,000 persons

(3) Job Availability
Japan’s job availability in November stood at 1.18, unchanged from the previous month. This ratio means there were 118 job openings for every 100 job seekers.
The ratio of regular employee job offers to applicants was 0.98, down 0.01 from the previous month.
The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.14, up 0.02 over the previous month. The number of new job offers decreased 10.4% from the same month the previous year. By industry, new job offers fell in all 11 major sectors, led by lifestyle and entertainment services, which underwent a 19.9% plunge from a year earlier. New job offers declined 17.2% in wholesale and retail and 14.1% in accommodation and restaurant services, partly due to the introduction of labor-saving technologies such as self-checkout systems.

Industrial Production²

Industrial Production Fluctuates Indecisively
Industrial output in November decreased 2.6% from the previous month, dragged down by a decline in production of lithium-ion batteries and personal computers.
Production, shipments, and inventories decreased, while inventory ratio stayed flat. The industries that mainly contributed to this decrease were as follows: (1) electrical machinery and information and communication electronics equipment; (2) motor vehicles; and (3) fabricated metals, in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase 1.3% in December and increase 8.0% in January.

November  2025           2015 average = 100

Family Income and Expenditure Survey³

This data is a key indicator of private consumption, which accounts for more than half of Japan’s gross domestic product.
(1) Expenditure of Households of Two Persons or More
Average monthly consumption expenditure of households of two or more persons in November was 314,242 yen, up 6.3% in nominal terms and up 2.9% in real terms over the previous year: the first increase in two months and the sharpest since May, as expenditure on food rebounded despite higher prices.

(2) Income and Expenditures for Workers’ Households
Average monthly income per household stood at 519,304 yen, up 1.0% in nominal terms but down 2.2% in real terms from the previous year. The average level of consumption expenditure was 350,349 yen per month, up 10.7% in nominal terms and up 7.2% in real terms year-on-year.

Consumer Prices⁴

The consumer price index (CPI) in November was 113.2 (2020 = 100), up 2.9% over the previous year and 0.4% over the previous month as food costs remained high. Core inflation (CPI less food and energy) was up 3.0% over the previous year and up 0.2% over the previous month. The inflation rate has remained at or above the Bank of Japan’s 2% price stability target since November 2022.
Food prices, excluding fresh items, climbed 7.0% over the previous year in November, driven by surging costs for items such as rice, chocolate, and eggs. Prices for rice, Japan’s staple food, soared 37.0%. As the government reinstated its subsidies to alleviate the burden of utility bills on households between January and November, energy prices were up 2.5% over one year earlier and up 3.1% over the previous month.

November 2025

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