Will spring 2026 Shunto base pay increases exceed 3.5%?
The Condition
BOJ raises policy rate to 1.00% or higher by end of July 2026
Our Ensemble Estimates
Given BOJ reaches 1.00%+: Will spring 2026 Shunto base pay increases exceed 3.5%?
Given BOJ stays below 1.00%: Will spring 2026 Shunto base pay increases exceed 3.5%?
Causal Effect
BOJ reaching 1.00%+ worth ~30pp increase in probability of Shunto >3.5% — strongest causal effect driven by powerful reverse causality (strong Shunto enables BOJ confidence to hike aggressively)
Why This Matters
Tests the relationship between BOJ normalization and wage outcomes. If the BOJ reaches 1.00%+, it implies strong Shunto results were a key enabler -- the meta-synthesis identifies Shunto as the 'fulcrum' where all six lenses converge. Strong results (>5%) validate the wage-price virtuous cycle and embolden further normalization. The 3.5% threshold represents the minimum level the analysis identifies as sustaining the normalization thesis. Two consecutive strong Shunto rounds have already shifted inflation expectations upward, and firm pricing behavior has structurally changed. The causal direction here may partially reverse: aggressive BOJ normalization could signal to firms that the inflationary environment is persistent, encouraging larger wage offers.
Resolution Criteria
Rengo (Japanese Trade Union Confederation) final tally of spring 2026 Shunto negotiations reports average base pay increase (excluding seniority-based raises) of 3.50% or higher. Rengo publishes preliminary results in mid-March and final tallies by July. Use the final tally figure.
Source Analysis
Shunto wage results identified by all six lenses as the single most important catalyst governing all normalization channels -- strong results validate BOJ thesis