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Toyota Motor (NYSE:TM) has agreed to union workers’ demands for major salary increases and record bonus payments, with the Japanese heavyweight’s decision raising hopes that the Bank of Japan may start interest rate hikes next week.
“Looking toward the future, we will meet the union’s demands for wages and bonuses,” the world’s top carmaker said in a statement.
While Toyota (TM) did not disclose the details of the pay hikes, the Toyota Motor Workers’ Union had demanded bonus payments worth 7.6 months of salary, and monthly wage increases of up to 28,440 yen, which is reportedly the biggest increase in 25 years.
According to the Japanese Trade Union Confederation (Rengo), employees at large companies in Japan had sought yearly raises of 5.85%. If approved, this would be the first time in 31 years that hikes have exceeded 5%.
Other major companies in Japan, including Panasonic (OTCPK:PCRFY), Nippon (OTCPK:NPSCY), and Nissan (OTCPK:NSANY), also committed to meeting all union demands for pay hikes.
The spring wage negotiations that wrapped on Wednesday are being closely watched, as they are expected to give BOJ officials more confidence in the timing of ending the negative rate policy.
