Core Insights - Early signs of Japan's 2026 wage negotiations indicate a robust salary increase despite profit pressures from U.S. tariffs, supporting further interest rate hikes by the Bank of Japan [1] - The Bank of Japan's Governor, Kazuo Ueda, seeks more data to understand the initial trends of next year's wage negotiations [1] - Labor unions are pushing for significant salary increases, with the Japanese Trade Union Confederation (RENGO) aiming for a 5% or more wage hike in 2026, following a historic increase in 2025 [1] Economic Implications - Continuous wage growth is expected to bolster private consumption, giving the Bank of Japan confidence to raise interest rates without jeopardizing economic recovery [1] - Despite substantial wage increases in recent years, real wage growth remains negative due to core consumer inflation consistently exceeding the Bank's 2% target [1] - RENGO's demand for a 5% wage increase in 2026 reflects a broader trend of labor organizations advocating for higher compensation amid rising living costs [1]