Japan Retail Sector: Minimum wage hike discussion: FY26 national weighted average guideline set at a 4.9% (¥55) increase to ¥1,176/hour

Research evidence excerpt

Japan Retail Sector: Minimum wage hike discussion: FY26 national weighted average guideline set at a 4.9% (¥55) increase to ¥1,176/hour

Global Research

28 July 2026ab

Japan Retail Sector Equities

JapanMinimum wage hike discussion: FY26 national

weighted average guideline set at a 4.9% (¥55) Retail

increase to ¥1,176/hour Takahiro KazahayaAnalyst

takahiro.kazahaya@ubs.com

+81-3-5208 6226

Summary Kazuki Oike

Analyst

The Ministry of Health, Labour and Welfare (MHLW) convened a meeting of the Central kazuki.oike@ubs.com

Minimum Wages Council subcommittee for FY26 on 28 July (JST). The guideline for the +81-3-5208 6964

FY26 national weighted average minimum hourly wage was set at ¥1,176, up ¥55

Hirotaro Hasegawa

(4.9%) from ¥1,121 in FY25 (Figure 1Nationwideweighted-averageminimumwageandYoYchange). As our forecast has been ¥1,177, the

Associate Analyst

announcement does not come as a surprise. In this report, we look at how the minimum hirotaro.hasegawa@ubs.com

wage is set in Japan and at historical trends and implications. +81-3-5208 6684

The minimum wage system

The minimum hourly wage in Japan differs by prefecture. In FY25, the minimum wage

ranged from ¥1,226 in Tokyo at the high end to ¥1,023 in Miyazaki and Okinawa at the

low end. Regional minimum wages are determined and revised by the Director-Generals

of each Prefectural Labour Bureau around August each year and take effect 30 days

after announcement (starting from 1 October). Ahead of this, the MHLW’s Central

Minimum Wages Council prepares guidelines for minimum wage revisions by region and

then presents these to Prefectural Minimum Wages Councils.

Minimum wage trends

The national weighted average minimum hourly wage was ¥665 in FY04, ¥713 in FY09