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Minimum wages in Japan are likely to rise by at least 6 percent this year, boosting the pay of low-income earners amid rising prices and an increasing cost of living.

On Aug. 4, the Central Minimum Wages Council, an advisory panel to the labor ministry, decided to recommend an increase of 63 yen or 6 percent, raising the national hourly minimum wage to 1,118 yen ($7.60) from 1,055 yen at present.

The recommendation, which is issued in the form of guidance, surpasses last year’s record increase of 50 yen, or 5 percent, and marks the largest hike in Japanese history.

Prefectures are not obligated to match the recommendation. However, they may also exceed it, as some did last year.

The recommendation came after a meeting the same day by the council’s subcommittee, which comprises labor and management representatives as well as scholars as public-interest figures.

The minimum wage varies between administrative regions, with employers in Tokyo paying the most, at 1,163 yen, and those in Akita Prefecture paying the least, at 951 yen.

If wages rise in line with the guideline, the minimum wage will surpass 1,000 yen in all prefectures for the first time.

The Central Minimum Wages Council decides which of three economic categories a prefecture falls under—A , B or C—and issues guidelines specific to that ranking. Tokyo, for example, is in group A.

This year, both A and B categories received the same recommendation: a raise of 63 yen.

C-ranked prefectures, the economically weaker group, were given a recommended increase of 64 yen.

This is the first time the increase for C-ranked areas has exceeded that for A and B ranks. It is seen as a bid to narrow regional gaps in wages.

Regional minimum-wage councils will now use these guidelines to determine the actual wage in each prefecture. Revisions will be approved in the fall.

Last year, local councils exceeded the central council’s guidelines for many prefectures.

For example, the increase in the minimum wage of Tokushima Prefecture exceeded the council’s guideline by 34 yen.

So, the national weighted average minimum wage suggested by the central council may end up higher if local councils decide to move in that direction.

During this year’s council discussions, labor representatives cited two factors in demanding a significant increase.

The first was rising prices, which are being felt nationwide. The second was a strong average base salary hike of 5.25 percent for permanent employees of companies, which was realized in this year’s “shunto” spring wage negotiations. Permanent employees often are not those who receive the minimum wage.

Prime Minister Shigeru Ishiba’s administration has set a goal of raising the national average minimum wage to 1,500 yen by the end of 2029. To meet this goal, it will need an average annual increase of 7.3 percent.

Ryosei Akazawa, the minister for economic revitalization, is in charge of wage increases to meet the 2029 goal. He has been pushing for larger increases in meetings with members of economic organizations.

Employer representatives understand the need for wage increases, but they pushed back. They pointed out that companies differ in their abilities to support wage increases, depending on their sizes and industries. After all, the companies themselves are being slammed by higher prices.

This resistance meant it was difficult to consider a hike of more than 6 percent. As if to underscore the complicated talks, the subcommittee held seven rounds of talks to decide the guidance, the most since 1981.

The central council examined data such as the 6.4 percent year-on-year increase in the consumer price index for food, which is an average from October 2024 to June 2025.

It also reviewed the 6.7 percent increase for items typically purchased about once a month. Both figures were used to try to persuade the employers’ representatives.

Ultimately, the guideline was finalized with an emphasis on the pain that low-income earners experience when essential goods cost more.

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