Japan's annual spring wage negotiations, known as Shunto, are underway with overwhelming momentum for salary increases, according to a recent NHK survey. Of 100 major companies polled, 97% indicated they are either planning or considering wage hikes for 2026, signaling continued pressure to attract and retain talent in an increasingly tight labor market. The survey results reflect Japan's ongoing struggle with labor shortages and rising living costs, factors that have pushed companies to maintain competitive compensation packages. For foreign workers in Japan, this development suggests a favorable environment for salary negotiations and potential improvements in employment conditions across various sectors. According to NHK's reporting, companies cite two primary drivers for their wage increase plans: the need to secure human resources in a competitive market and the necessity to help employees cope with rising prices. This marks a continuation of wage growth trends that began gaining momentum in recent years, reversing decades of wage stagnation in Japan. However, the optimistic headline figures mask significant challenges, particularly for small and medium-sized enterprises (SMEs). NHK's coverage of the spring negotiations highlights growing concerns about whether smaller companies can sustain the wage increase momentum established by major corporations. Many SMEs face mounting pressure as they struggle to balance employee compensation demands with operational costs and profitability. For expats working in Japan, the implications vary depending on company size and industry. Those employed by large corporations or multinationals are more likely to benefit from structured wage increases as part of company-wide policies. These organizations typically have the financial resources and institutional frameworks to implement systematic raises. Smaller companies, while eager to retain talent, may approach wage increases more selectively or creatively. Some SMEs are exploring alternative compensation strategies, such as performance-based bonuses, improved benefits packages, or enhanced work-life balance initiatives, when direct salary increases prove financially challenging. The spring wage negotiations traditionally occur between February and March, with labor unions and management representatives from major industries negotiating base pay increases and bonuses. Results from leading companies often set benchmarks that influence wage decisions across entire sectors and throughout the broader economy. Foreign workers should be aware that Japanese companies typically implement wage increases in April, coinciding with the start of the fiscal year. Even if you're not directly involved in union negotiations, company-wide wage policies often apply to all employees, including foreign staff members. For those considering job changes or contract renewals, this year's Shunto climate presents opportunities. The near-universal commitment to wage increases among major employers suggests that job seekers may have enhanced negotiating power, particularly in industries facing acute labor shortages such as technology, healthcare, manufacturing, and hospitality. Experts recommend that foreign workers research industry-specific wage trends and company financial performance before salary discussions. Understanding your company's size, profitability, and position within its industry can help set realistic expectations and strengthen negotiating positions. It's also worth noting that wage increases in Japan may include adjustments to base salary, annual bonuses, or both. Clarifying which components of compensation are being adjusted can help you accurately assess the real value of proposed increases. While the 97% figure represents intentions rather than guaranteed outcomes, the overwhelming consensus among major employers indicates that 2026 will likely see continued wage growth. For foreign residents, this represents a positive shift in Japan's employment landscape, potentially improving living standards and making long-term residence more financially sustainable. As negotiations progress through spring, monitoring announcements from major companies in your industry can provide insights into likely compensation trends and help inform career planning decisions for the coming year.