TrendForce

2025-03-31

China Manufacturing PMI Expands for Second Consecutive Month, but Domestic Demand Still Weak

The official manufacturing Purchasing Managers' Index (PMI) rose to 50.5 in March (prior: 50.2), marking the second consecutive monthly increase and the highest level since March 2023, according to National Bureau of Statistics of China on March 28. Within the sub-indexes, new orders climbed to 51.8 (prior: 51.1) and production edged up to 52.6 (prior: 52.5), both registering gains for a second straight month. However, labor market conditions remained subdued, with the employment index stuck in contraction at 48.2 (prior: 48.6). On the inventory front, raw material inventories slightly increased to 47.2 (prior: 47.0), remaining at low levels, while finished goods inventories declined marginally to 48.0 (prior: 48.3), pushing the gap between new orders and client inventories to 3.8 (prior: 2.8). Among other components, new export orders rose to 49.0 (prior: 48.6), the highest since May 2023. In contrast, imports dropped sharply to 47.5 (prior: 49.5), while backlogs of work fell further to 45.6 (prior: 46.0), indicating that production and sales may still be heavily reliant on external demand, with domestic demand showing limited improvement. By sector, equipment manufacturing and high-tech manufacturing continued to expand under government policy support, rising to 52.0 (prior: 50.8) and 52.3 (prior: 50.9), respectively. In contrast, consumer goods manufacturing activity edged up only slightly to 50.0 (prior: 49.9), further highlighting the lack of significant domestic demand recovery. Overall, the improvement in March PMI was driven primarily by strength in high-tech and equipment manufacturing, along with resilient export demand. However, the drag from the real estate downturn on household balance sheets remains unresolved, and private consumption momentum is still weak. Although the Chinese government continues to stimulate domestic consumption through policies such as “trade-in” subsidies, this approach—primarily targeting durable goods—may struggle to sustain long-term momentum. Meanwhile, escalating U.S. tariff threats and the rising tide of global trade barriers present additional challenges, leaving China with the critical task of how to pivot toward domestic demand as a more sustainable engine of long-term growth. Read more at Datatrack

By TrendForce

2025-03-28

Japan Tokyo CPI Jumps on Rice, BoJ Rate Hike Seen in May

Tokyo CPI rose 2.9% year-over-year in March (prior: 2.8%) and 0.4% month-over-month (prior: -0.4%), according to Japan Ministry of Internal Affairs and Communications on March 28 . The increase was primarily driven by continued gains in non-fresh food prices, which accelerated to 5.6% YoY (prior: 5.0%). Rice prices, in particular, surged again due to ongoing supply shortages, with a staggering year-on-year gain of 92.4%. However, declines in fresh food and energy prices helped offset part of the upward pressure. Core CPI excluding fresh food rose 2.4% YoY (prior: 2.2%), while the so-called "core-core" CPI—excluding both fresh food and energy—climbed to 2.2% YoY (prior: 1.9%), marking the highest level since April 2024. Prices for services, a key indicator closely watched by the Bank of Japan (BoJ), rose 0.8% YoY (prior: 0.6%), reflecting continued upward pressure amid expectations for strong wage growth. According to a recent survey by Teikoku Databank, major food manufacturers raised prices on over 2,000 items in March due to the weaker yen and rising labor and raw material costs—marking the third large-scale price hike within a year. The Bank forecasts that by April, the cumulative number of items with price hikes is likely to surpass the full-year total of 12,520 items recorded in 2024. Although the BoJ left its policy rate unchanged at 0.5% last week—citing uncertainties related to U.S. tariff policies—persistent inflation continues to erode household purchasing power. Coupled with the prospect of record-breaking wage hikes from the ongoing Shunto spring labor negotiations, these developments provide further justification for the BoJ to proceed with monetary policy normalization. Moreover, during a parliamentary hearing on Wednesday (March 26), BoJ Governor Kazuo Ueda stated the central bank would maintain flexibility regarding its next policy decision. This prompted markets to bring forward their rate hike expectations, with overnight index swaps now pricing in a move to 0.75% as early as May—earlier than previous expectations for June or July. Read more at Datatrack

By TrendForce

2025-03-26

U.S. Consumer Confidence Declines Again on Inflation and Policy Uncertainty

The U.S. Consumer Confidence Index fell to 92.9 in March (prior: 100.1), marking its fourth consecutive monthly decline, according to Conference Board on March 26. The Present Situation Index edged down to 134.5 (prior: 138.1), while the Expectations Index saw a sharp drop to 65.2 (prior: 75.1), reaching its lowest level in 12 years. According to the report, among the five major subcomponents of the index, only the assessment of the “current labor market” showed marginal improvement. In contrast, consumer expectations for the future labor market and income prospects weakened significantly, underscoring heightened pessimism over the economic and employment outlook amid persistent policy volatility and uncertainty. Additionally, concerns over soaring egg prices in recent months and ongoing fears surrounding tariff policies pushed one-year inflation expectations higher—from 6.2% in February to 5.8% in March. Similar findings were reflected in the University of Michigan’s March survey, where one-year inflation expectations rose from 4.3% to 4.9%, the highest since November 2022, while five-year expectations surged to 3.9% (prior: 3.5%), the largest monthly increase since 1993. On the household finances front, although consumers perceived a slight improvement in their current financial conditions, expectations for future finances fell to the lowest level since July 2022. In terms of purchasing intentions, sentiment toward buying homes and vehicles declined, while demand for household appliances and electronics saw a modest uptick. This may reflect consumer expectations of rising prices driven by upcoming tariff changes, prompting early purchases. Overall, the Trump administration’s continued implementation of federal downsizing, immigration restrictions, and tariff policies appears to be intensifying concerns about inflation and economic slowdown, further dampening consumer confidence. However, from a “hard data” perspective, core retail sales remain resilient, nonfarm employment continues to expand, and the unemployment rate remains near historical lows—all suggesting the U.S. economy is still experiencing moderate growth. Therefore, short-term volatility in “soft data” such as confidence surveys should not be overinterpreted. Read more at Datatrack

By TrendForce

2025-03-24

Key Focus This Week: US PCE & Euro Area PMI

Last week, although the Federal Reserve significantly revised down its growth projections and raised its inflation forecasts in the Summary of Economic Projections, Chair Powell emphasized that the inflationary impact from tariffs would be temporary. At the same time, the Fed maintained its projection for a 50 bps rate cut this year and announced a slowdown in the pace of balance sheet reduction, which helped ease market concerns about a potential economic slowdown and pushed the S&P 500 up 0.51% for the week to close at 5,667.57. In the bond market, the Fed’s reaffirmation of its 50 bps rate cut projection and its downward revisions to economic growth contributed to a modest decline in U.S. 10-year Treasury yields by 7 bps to around 4.25%. The U.S. dollar index remained near 104.1. Key Economic Data Last Week FOMC Rate Decision: At its March meeting, the Federal Reserve unanimously voted to keep interest rates unchanged at 4.25%–4.50%, in line with market expectations. The statement removed the language that “risks to achieving employment and inflation goals are roughly balanced,” replacing it with “uncertainty in the economic outlook has increased,” highlighting concerns over federal spending cuts, immigration policy, and tariff fluctuations. On monetary policy, the Fed reiterated that it will “carefully assess incoming data” before making further adjustments to interest rates. While quantitative tightening will continue, starting in April, the monthly cap on Treasury runoff will be reduced from $25 billion to $5 billion, with no change in caps for agency debt and MBS. This brings the total monthly runoff pace from $60 billion to $40 billion. Summary of Economic Projections: Reflecting shifts in government policy and the impact of tariffs, the Fed lowered its GDP growth forecasts for 2025–2027 and raised its inflation estimates for 2025. GDP Growth: 2025: 1.7% (prior: 2.1%), 2026: 1.8% (prior: 2.0%), 2027: 1.8% (prior: 1.9%) Unemployment Rate: 2025: 4.4% (prior: 4.3%), 2026: 4.3% (unchanged), 2027: 4.2% (unchanged) PCE Inflation: 2025: 2.7% (prior: 2.5%), 2026: 2.2% (prior: 2.1%), 2027: 2.0% (unchanged) Core PCE: 2025: 2.8% (prior: 2.5%), 2026: 2.2% (unchanged), 2027: 2.0% (unchanged) The 2025 median dot in the dot plot indicates a policy rate of 3.875% (down 50 bps), further declining to 3.375% in 2026 and 3.125% in 2027 (down 25 bps), with the long-run neutral rate estimated at around 3.0%. Although the overall message remained “gradual easing,” a slight upward shift in the dot plot revealed that more members prefer a slower pace of rate cuts to observe the full impact of policy changes. Read more at Datatrack U.S. February Retail Sales: Retail sales growth in February slowed to 3.1% year-over-year (prior: 3.9%), while monthly growth rebounded to 0.2% (prior: -1.2%). Among the 13 major retail categories, six posted gains, primarily led by increases in food and beverage sales, online retailers, and health and personal care. Sales related to durable goods—such as autos and electronics—continued to decline, although the pace of contraction slightly eased. Meanwhile, food services and drinking places, which serve as a gauge of household financial health, also weakened further, registering the lowest level in a year. However, core retail sales—excluding autos and gasoline—still rose 3.5% YoY (prior: 3.6%) and recovered to 0.5% MoM (prior: -0.8%). Control group sales, which also exclude food services and building materials, climbed 4.4% YoY (prior: 3.7%) and 1.0% MoM (prior: -1.0%), indicating that overall consumer spending remains resilient. Read more at Datatrack Bank of Japan Rate Decision: At its March meeting, the Bank of Japan unanimously kept the policy rate unchanged at 0.50%, in line with expectations. The statement noted that inflation has been driven by rising service prices amid wage increases, as well as soaring rice prices due to supply shortages. The BoJ expects rice prices to remain elevated through 2025, and with the government energy subsidy expiring in March, upside risks to inflation remain. While recent economic data has largely met the central bank’s expectations and wage growth appears on track, uncertainty surrounding U.S. retaliatory tariff policies—set to be announced on April 2—continues to cloud the global trade outlook. The BoJ has incorporated these risks into its policy assessment, and markets view the upcoming meeting as pivotal for the next potential rate hike. Read more at Datatrack Key Economic Data This Week U.S. PCE: While temporary distortions from January have eased, February PPI showed upward pressure in some PCE components due to tariff impacts. Still, the Atlanta Fed projects February PCE inflation to slow to +2.37% YoY (prior: 2.51%), with core PCE easing to +2.59% (prior: 2.66%). Read more at Datatrack Eurozone PMI: While Germany’s election outcome has reduced political uncertainty and its €500 billion fiscal expansion boosted sentiment, uncertainty over U.S. trade policy remains elevated. The Eurozone PMI is expected to remain in contraction at 48.3.

By TrendForce

2025-03-18

US February Retail Sales Miss Expectations, but Core Sales Indicate Resilient Consumer Spending

The U.S. retail sales growth slowed to 3.1% year-over-year in February (prior: 3.9%), while month-over-month rebounded to 0.2% (prior: -1.2%), according to U.S. Census Bureau on March 17 , falling short of market expectations of 0.6%. Among the 13 major retail categories, six recorded growth, primarily driven by a 0.4% month-over-month increase in food and beverage sales (prior: 0.1%), a 2.4% rebound in online retail sales (prior: -2.4%), and a 1.7% rise in healthcare and medical spending (prior: -1.1%). Conversely, durable goods-related sales, particularly in the automotive sector, continued to weaken, with annual growth slowing to 3.1% (prior: 5.7%) and monthly sales declining by 0.4% (prior: -3.7%). Electronic goods sales saw a steeper contraction, with annual growth dropping to -5.3% (prior: -0.5%) and monthly sales decreasing by -0.3% (prior: -1.1%). Food services and drinking place, a key indicator of household financial conditions, also weakened further, growing just 1.5% year-over-year (prior: 4.1%) and declining 1.5% month-over-month (prior: 0.0%), marking the lowest level in a year. This slowdown not only reflects the crowding-out effect from preemptive purchases in prior months due to tariff concerns but also suggests that consumer sentiment may be deteriorating amid ongoing uncertainty regarding future trade policies. Additionally, recent stock market weakness may have reduced disposable income, further restraining purchases of durable goods. However, core retail sales, which exclude auto and gasoline sales, remained resilient, growing 3.5% year-over-year (prior: 3.6%) and rebounding 0.5% month-over-month (prior: -0.8%). Furthermore, the control group measure—excluding food services and building materials—showed even stronger growth, with annual gains reaching 4.4% (prior: 3.7%) and monthly growth accelerating to 1.0% (prior: -1.0%), indicating that overall consumption retains a degree of strength. Overall, February retail sales presented mixed signals, with monthly growth once again falling short of expectations, suggesting a degree of cooling in consumer spending. However, following the weather-related weakness in January, spending on durable goods such as autos and electronics showed signs of stabilization, while core retail sales maintained strong momentum, indicating that a broad-based consumer slowdown has yet to materialize. Following the data release, markets took note of the resilience in core retail sales, which signaled continued strength in U.S. consumer spending. Additionally, Federal Reserve Chair Jerome Powell’s recent remarks, in which he highlighted a robust labor market and ongoing progress toward the Fed’s 2% inflation target, helped alleviate recession concerns. Current market expectations suggest that the Fed will maintain its cautious stance, with total rate cuts projected at 50 bps for the year, likely to occur in June and September. Read more at Datatrack

By TrendForce

2025-03-14

OPEC, IEA, and EIA Oil Price Forecast: Long-Term Supply Remains Excessive, Two Agencies Lower 2025 Demand

The three major energy agencies (OPEC, IEA, and EIA) have released their latest global crude oil market forecasts for March. All three agencies generally maintain the outlook that Asian countries, such as China and India, will continue to drive global oil demand growth. However, due to increasing uncertainty in the global economic environment, some agencies have slightly revised down their demand growth projections for 2025. On the supply side, despite short-term supply tightness caused by U.S. sanctions on Iran and Venezuela, crude oil supply is expected to expand as the U.S. and other countries continue to increase production and OPEC resumes production growth in April. Consequently, the long-term outlook for global crude oil supply remains in surplus. Below is a detailed summary of the March forecasts from the three major agencies regarding global oil supply and demand: OPEC: Global oil demand in 2025 is expected to remain at 1.4 mb/d, with total demand reaching 105.2 mb/d for the year. This forecast primarily reflects strong demand from air travel and land transportation. Non-OECD countries, including China and India, are projected to contribute 1.3 mb/d of demand growth, while OECD countries, including the U.S., will see a more modest increase of 0.1 mb/d. Growth in 2026 is also expected to remain at 1.4 mb/d, with total demand reaching 106.6 mb/d for the year. IEA: Although the U.S. has intensified sanctions on Iran, and Chevron’s export license for Venezuelan oil is set to expire in April, Kazakhstan’s crude oil production has reached an all-time high, driven by accelerated expansion at the Tengiz oil field. As a result, global crude oil supply in February has already increased to 103.3 mb/d. In 2025, global oil supply is expected to grow by 1.5 mb/d (previously 1.6 mb/d), reaching 104.4 mb/d for the year (previously 104.5 mb/d).On the demand side, while China’s petrochemical sector continues to drive global oil demand growth—accounting for as much as 60% of the total increase—the IEA has slightly revised down its 2025 demand growth estimate to 1.0 mb/d (previously 1.1 mb/d) due to rising macroeconomic uncertainties and weaker-than-expected actual delivery data in February. This puts total demand for the year at 103.9 mb/d (previously 104.0 mb/d). If OPEC follows through on its announced production increases, the global oil surplus could exceed 0.6 mb/d. If OPEC members increase production beyond the announced levels, the global surplus could rise to 1.0 mb/d. EIA: Although OPEC+ has announced plans to increase production in April, the actual production increase is expected to be lower than initially projected. As a result, OPEC’s 2025 output is still forecasted to decline by 0.2 mb/d (compared to a 1.3 mb/d reduction in 2024). Meanwhile, non-OPEC+ countries such as the U.S., Canada, and Brazil are expected to remain the primary sources of crude oil supply growth.Global crude oil supply growth for 2025 has been revised downward to 1.4 mb/d (previously 1.7 mb/d), bringing total supply for the year to 104.2 mb/d (previously 104.6 mb/d). In 2026, supply growth is expected to remain at 1.6 mb/d, reaching a total of 105.8 mb/d (previously 106.2 mb/d).On the demand side, non-OECD Asian countries remain the primary drivers of growth. India’s demand is expected to rise by 0.3 mb/d in both 2025 and 2026, while China’s demand growth, supported by economic stimulus policies, is forecasted at 0.3 mb/d in 2025 and 0.2 mb/d in 2026. However, increasing macroeconomic uncertainties have led the EIA to slightly revise down its 2025 demand growth estimate to 1.3 mb/d (previously 1.4 mb/d), bringing total demand for the year to 104.1 mb/d (previously 104.2 mb/d). In contrast, the 2026 demand growth forecast has been revised up to 1.2 mb/d (previously 1.1 mb/d), with total demand reaching 105.3 mb/d (previously 105.2 mb/d). Overall, all three agencies agree that global crude oil demand will continue to grow steadily from 2025 to 2026, primarily driven by economic activity and petrochemical demand in non-OECD countries, particularly China and India. However, given weaker-than-expected demand data for February and rising macroeconomic uncertainties, both the IEA and EIA have slightly revised down their oil demand forecasts. The average demand forecast from the three agencies now stands at approximately 104.4 mb/d. From a supply perspective, while intensified U.S. sanctions on Iran and the revocation of Venezuelan oil export licenses have caused short-term supply disruptions, the continued supply expansion from non-OPEC countries—including the U.S., Canada, and Brazil—along with OPEC’s announced production increases in April, will keep global crude oil supply in surplus by an average of 0.3 mb/d. This suggests that medium- to long-term oil prices may remain under pressure, and whether OPEC follows through on its planned production increases will be a key factor influencing oil prices in the coming months. Read more at Datatrack

By TrendForce

2025-03-13

U.S. Core CPI Declines in February, but Tariff Uncertainty May Delay Fed Rate Cuts

The U.S. consumer price index (CPI) increased by 2.8% year-over-year in February (prior: 3.0%), according to U.S. Bureau of Labor Statistics on March 12, marking the end of a four-month consecutive rise. On a monthly basis, CPI rose 0.2% (prior: 0.5%). The core CPI increased 3.1% year-over-year (prior: 3.3%), the slowest pace since April 2021, with a 0.2% month-over-month increase (prior: 0.4%). All four inflation metrics lower than market expectations. The decline in CPI was primarily driven by the following factors: Energy prices moderated to a 0.2% month-over-month increase (prior: 1.1%), with fuel oil prices sharply falling to 0.8% (prior: 6.2%), while gasoline prices declined to -0.9% (prior: 1.8%), reflecting the continued downturn in international crude oil prices. Food prices rose 0.2% month-over-month (prior: 0.4%), as egg prices, which surged in January, started to cool, increasing by 10.4% (prior: 15.2%). Core goods prices declined -0.1% (prior: 0.2%), with used car prices easing to 0.9% (prior: 2.2%) and recreational product prices dropping to -0.7% (prior: 0.3%), contributing significantly to the overall decline in core goods inflation. Core services inflation slowed to 0.3% month-over-month (prior: 0.5%), with housing services prices easing to 0.3% (prior: 0.4%), though still accounting for nearly 50% of the total monthly inflation increase. Additionally, auto insurance prices, which spiked last month, cooled to 0.3% (prior: 2.0%), and airfare prices plunged to -4.0% (prior: 1.2%), becoming the key drivers behind the moderation in core services inflation. (Source: BLS, TrendForce) Overall, the decline in inflation not only reflects the dissipation of temporary factors such as severe winter weather, wildfires, and avian flu outbreaks from the prior month, but also the significant drop in airfare and auto insurance prices, which pulled down the overall index. Notably, rents and owners’ equivalent rent remained stable on a monthly basis, but their annual growth rates further declined to 4.1% (prior: 4.2%) and 4.4% (prior: 4.6%), respectively, indicating that the primary resistance to core inflation continues to fade. Despite the better-than-expected inflation data, concerns remain regarding the potential impact of tariff-related cost pressures. The February PMI report has already signaled rising input prices due to tariff concerns, suggesting that the latest CPI data may not yet fully reflect the inflationary impact of new tariff policies. Meanwhile, Truflation (which integrates real-time data from over 30 sources, including Amazon, Walmart, and Zillow, covering over 13 million products) has shown that inflation has further declined to around 1.3%, down from 2.1% at the time of the February CPI release, potentially indicating a sharp slowdown in consumer spending. Currently, the market expects that due to high uncertainty surrounding the Trump administration’s tariff policies, the Federal Reserve will likely maintain a wait-and-see approach in the short term, with the first rate cut anticipated around June. However, as downside risks to consumer spending and the broader economy become more pronounced, expectations for total rate cuts in 2024 have expanded to over 50 basis points. Read more at Datatrack

By TrendForce

2025-03-12

U.S. Job Openings Rise in January, but Tariff Policies Add More Uncertainty

The US job openings surged in January, according to the U.S. Bureau of Labor Statistics on March 11. Meanwhile, hiring and layoffs remained at historically low levels, indicating that the U.S. labor market remains resilient while gradually cooling. In January, job openings rose to 7.74 million (prior: 7.508 million), surpassing market expectations of 7.6 million and remaining above the pre-pandemic average of 7.2 million. The increase in job openings was primarily driven by gains in retail trade (+143,000), financial services (+122,000), and education and healthcare (+41,000). The job openings rate edged up to 4.6% (prior: 4.5%), while the ratio of job openings to unemployed persons slightly increased to 1.13 (prior: 1.09), though still below the pre-pandemic average of 1.20. Hiring remained relatively stable at 5.393 million (prior: 5.374 million), with the hiring rate holding at 3.4%, continuing to hover at historical lows. Total separations increased to 5.252 million (prior: 5.082 million), pushing the separation rate up to 3.3% (prior: 3.2%). This rise was mainly attributed to a 170,000 increase in voluntary quits, lifting the quits rate to 2.1% (prior: 1.9%) and interrupting the downward trend that had persisted since 2022. Conversely, layoffs declined by 34,000, bringing the layoffs rate down to 1.0% (prior: 1.1%), marking a new low since June of last year and remaining at historically low levels. Overall, the January JOLTs data highlights a labor market characterized by "low hiring and low layoffs," maintaining resilience. However, it is important to note that this report has a significant lag, and the data has yet to reflect the impact of federal government spending cuts and the uncertainty surrounding the shifting tariff policies. Meanwhile, on the previous day, Trump announced a doubling of tariffs on Canadian steel and aluminum to 50% in retaliation for Canada imposing a 25% surcharge on U.S. electricity imports, further threatening to impose the same high tariffs on the automotive sector. However, as Canada subsequently withdrew the surcharge, Trump immediately rescinded the 50% steel and aluminum tariffs on Canada while maintaining the broader 25% tariffs on all steel and aluminum imports with no exemptions. This back-and-forth action caused U.S. stock markets to fluctuate sharply throughout the day. Since taking office, Trump's erratic and shifting tariff policies have continued to inject significant uncertainty into markets. As seen in recent PMI reports, ADP nonfarm employment data, and the Bureau of Labor Statistics (BLS) employment report, the unpredictability of these policies has led businesses to adopt a more cautious approach toward investment, commercial activities, and hiring. As a result, the labor market has exhibited a more pronounced cooling trend, with the impact expected to become more evident in the upcoming February JOLTs report. Read more at Datatrack

By TrendForce

2025-03-11

Japan’s Real Household Spending Grows for Second Month, Shunto Negotiations Key to Future Growth

The nominal household expenditures in January amounted to JPY 305,521, marking a 5.5% year-over-year increase (prior: 7.7%), according to The Ministry of Internal Affairs and Communications of Japan . Meanwhile, real household spending grew 0.8% year-over-year (prior: 2.7%), significantly below the market expectation of 3.7%, but still extending growth for the second consecutive month. The slowdown in real household spending growth primarily reflects the fading momentum from strong bonus-driven spending in November-December, as well as adverse factors such as poor fresh vegetable harvests and rice shortages, which pushed the CPI to 4.0% in January, further eroding Japanese consumers' purchasing power. Separately, the Ministry of Health, Labour and Welfare released wage data yesterday, reporting that nominal wages in January stood at JPY 296,000, increasing 2.8% year-over-year (prior: 4.4%), slightly below the market expectation of 3.2%. Breaking down wage components, the decline in year-over-year growth was mainly attributed to a 3.7% drop in bonuses, which had surged in November-December. However, base wages for full-time employees rose 3.1% year-over-year (prior: 2.7%), marking the largest increase since October 1992. Excluding overtime pay, base wages also recorded a 3.1% gain (prior: 2.8%). Despite persistent inflationary pressures, real wages declined 1.8% year-over-year (prior: 0.3%), breaking a two-month streak of growth and recording the sharpest drop since March 2024. Nonetheless, the upward trajectory of wage growth remains intact. Last week, Japan’s largest labor union federation, Rengo, stated on March 6 that it will push for an average wage increase of 6.09% this year (2024: 5.85%), the highest level since 1993. Small and medium-sized enterprises (SMEs) are also demanding a 6.57% wage hike (2024: 5.97%), indicating broad-based wage pressures. Considering persistent inflation and ongoing labor shortages, markets anticipate that the Shunto wage negotiations—to be released this Friday—will likely maintain strong growth momentum. If realized, this would further support the Bank of Japan’s ongoing path toward monetary policy normalization. Read more at Datatrack

By TrendForce