Japan's annual spring wage negotiations, known as shunto, have officially begun as labor unions and business leaders meet to determine salary increases for the coming year. For foreign workers in Japan, these negotiations will significantly impact take-home pay and living standards amid persistent inflation concerns. According to NHK, the Japanese Trade Union Confederation (Rengo) and the Japan Business Federation (Keidanren) held their first formal meeting on January 27, 2026, marking the official start of this year's spring labor offensive. The negotiations come at a critical juncture as Japan attempts to maintain wage growth momentum while navigating economic headwinds from international trade tensions. The Electrical, Electronic and Information Union of Workers (JEIU), representing major electronics manufacturers, has set an ambitious target by demanding base salary increases of at least 18,000 yen per month, according to NHK. This represents one of the highest wage increase requests in recent history and signals unions' determination to secure meaningful raises that outpace inflation. For context, an 18,000 yen monthly increase translates to approximately 216,000 yen annually before taxes. The aggressive stance reflects growing pressure on employers to ensure wages keep pace with rising living costs. Japan has experienced sustained inflation over the past two years, eroding purchasing power for both Japanese and foreign workers. Union leaders argue that without substantial wage increases, workers cannot maintain their standard of living despite Japan's economic recovery. However, employers face their own concerns. NHK reports that business leaders, particularly those representing small and medium-sized enterprises, have expressed worry about their capacity to grant significant raises. American tariff policies and potential trade disruptions threaten corporate earnings, making companies hesitant to commit to large wage increases that could strain finances if revenues decline. This tension between worker demands and business caution creates uncertainty for Japan's estimated 1.8 million foreign workers. While large corporations may have greater flexibility to grant raises, employees at smaller firms—where many expats work—may see more modest increases or face tougher negotiations. The spring wage negotiations typically conclude in mid-March, with major companies announcing their decisions first. These settlements often set benchmarks that smaller companies follow, creating a ripple effect throughout the economy. Foreign workers should monitor announcements from their industry's major players to gauge likely outcomes for their own employers. For expats, understanding shunto is crucial because Japanese employment practices typically involve annual raises negotiated collectively rather than individual salary discussions common in Western countries. Even non-unionized workers often benefit indirectly, as companies adjust compensation to remain competitive with industry standards established during spring negotiations. The outcome of this year's negotiations will reveal whether Japan can sustain the wage growth momentum from previous years or if economic uncertainty will dampen raises. Last year saw significant wage increases across many sectors, but maintaining that trajectory requires continued corporate profitability and economic stability. Foreign workers should discuss with their employers how spring negotiation outcomes might affect their compensation. While individual negotiation opportunities may be limited in traditional Japanese companies, understanding the broader wage environment helps set realistic expectations and identify whether one's compensation remains competitive. As negotiations progress through February and March, workers should watch for announcements from major companies in their industries. These will provide the clearest indication of likely salary adjustments and help foreign residents plan their household budgets for the coming fiscal year, which begins in April. The stakes are high: successful negotiations could boost consumer spending and economic growth, while disappointing results might dampen household finances and economic momentum. For Japan's foreign workforce, the coming weeks will determine whether paychecks keep pace with the rising cost of living.