Japan's major labor unions are set to demand wage increases of 5% or more in 2026, potentially accelerating the Bank of Japan's timeline for interest rate hikes. The unions, including Rengo, which represents around seven million workers, aim to continue the trend of significant pay raises seen last year. Business surveys suggest companies are prepared to support robust wage growth, driven by a tight labor market and strong manufacturing sentiment. Bank of Japan Governor Kazuo Ueda is scheduled to speak to business leaders on December 1, with market participants keenly observing for indications of policy shifts. A narrow majority of economists now anticipate a possible rate hike as early as December, contingent on sustained wage growth.