A week ago, I explained what ‘shunto’ means. Today, I have confirmation that the wage increases have already been decided.
Japan’s largest labour union Rengo says it is aiming for an average wage increase of 6.09% in 2025.
In the spring wage negotiations in 2024, a wage increase of 5.25% was achieved, and in 2023, 3.80%. This is therefore another step forward, which also surpasses the alleged wage increase of ‘at least 5%’ in 2025. This is an open door for the BOJ to work on raising interest rates in the coming months. Specially that inflation is close to 4%.
Technical analysis of EURJPY
Today euro extended its gains above $1.08, reaching a fresh four-month high, after the ECB delivered a widely expected 25bps rate cut and acknowledged that monetary policy is becoming less restrictive. Policymakers adjusted their language, moving away from previous references to a “restrictive policy” and reinforcing that they are not on a pre-set course.
I am betting on a stronger yen rather than a weaker euro in this case. MACD went bearish, it is an early stage so declines might last for few next H4 candles like it happened 4 weeks ago.
