Japan's largest labor union confederation, Rengo (Japanese Trade Union Confederation), has officially announced its wage negotiation strategy for the 2025 spring labor offensive, known as "shunto," demanding a minimum 5% pay increase for the third consecutive year. This marks a significant continuation of aggressive wage demands as workers struggle with persistent inflation and declining real wages. According to NHK, Rengo formally decided on November 28, 2025, to request wage increases of at least 5%, including regular incremental raises, during next year's spring negotiations with employers. The union confederation, which represents approximately 7 million workers across Japan, is prioritizing improvements in real wages adjusted for inflation, a concern that directly affects both Japanese and foreign workers employed in the country. Rengo President Tomoko Yoshino met with Prime Minister Sanae Takaichi on November 28 to request government cooperation in achieving the 5% wage increase target. This high-level engagement underscores the political importance of wage growth in Japan's economic policy, as the government seeks to stimulate domestic consumption and break free from decades of wage stagnation. For foreign residents working in Japan, these negotiations carry significant implications. While Rengo primarily represents workers at large corporations and unionized workplaces, the outcomes of spring wage negotiations typically set benchmarks that influence compensation across various industries and company sizes. Even non-unionized employees and workers at small and medium enterprises often see their wages adjusted based on trends established during shunto. The push for substantial wage increases comes against a complex economic backdrop. Japan's unemployment rate remained stable at 2.6% in October 2025, unchanged from the previous month, according to data from the Ministry of Internal Affairs and Communications reported by NHK. However, the job-to-applicant ratio, which measures labor market tightness, declined to 1.18 in October from 1.20 in September, as reported by the Ministry of Health, Labour and Welfare. This slight cooling in the labor market reflects challenges facing Japanese businesses. According to NHK, the ministry attributes the decline to companies revising their hiring plans due to rising raw material costs and the impact of minimum wage increases. For expats, this suggests that while the labor market remains relatively tight by historical standards, employers may be more cautious about recruitment and compensation increases than in recent years. The consecutive years of 5% wage demands represent a dramatic shift from Japan's long period of minimal wage growth. Rengo's strategy acknowledges that nominal wage increases alone are insufficient if inflation erodes purchasing power. The focus on real wage improvement is particularly relevant for foreign workers who may be supporting families abroad or planning their long-term financial futures in Japan. Experts note that actual wage increases often fall short of union demands, with negotiations typically resulting in compromises between labor and management. In recent years, however, large corporations have been more willing to grant significant raises due to labor shortages and government pressure to support household incomes. For foreign professionals working in Japan, the spring wage negotiations serve as an important indicator of compensation trends. Those employed at Japanese companies should pay attention to their employer's response to union demands, even if they are not union members themselves. Additionally, expats working for foreign companies in Japan may find that local market wage trends influence their compensation packages. As Japan continues navigating post-pandemic economic recovery and persistent inflation, the outcome of the 2025 spring wage negotiations will significantly impact the financial well-being of all workers in the country, including the growing population of foreign residents who contribute to Japan's economy and society.