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Nomura to raise pay for 4,000 employees in Japan to help spur economy

Bloomberg

Nomura Holdings Inc., Japan’s biggest brokerage, will raise salaries for about 4,000 employees in the country as Prime Minister Shinzo Abe urges companies to help defeat deflation and sustain the economic recovery.

Base pay at the Nomura Securities Co. unit will climb an average 2 percent starting in April, the Tokyo-based firm said in a statement on its website Friday. The increases target younger employees, who are more likely to spend money and contribute to the world’s third-largest economy, it said.

Abe is pushing businesses to pay their workers more as prices begin to climb while wages continue to slump, eroding households’ spending power. Consumer prices excluding fresh food rose 0.9 percent in October from a year earlier, a fifth straight gain, government figures showed the same day.

Nomura’s 2 percent pay increase is the same rate as the Bank of Japan’s target for inflation. The central bank unveiled a policy in April of doubling the monetary base in two years to achieve the goal. Regular wages excluding overtime and bonuses fell 0.6 percent in September from a year earlier, the 16th consecutive decline, labor ministry figures show.

About 4,000 of Nomura Securities’ 13,200 employees will receive an extra ¥5,000 to ¥10,000 a month, Kenji Yamashita, a Tokyo-based company spokesman, said by phone. The pay increase will cost Nomura about ¥300 million for the year, he said.

Abe said last month that he plans to boost employment and raise wages, creating a “virtuous circle” that fuels consumption and investment. The government began holding meetings with business and union leaders in September as part of a campaign to persuade businesses to bolster incomes.

Lawson Inc., Japan’s second-largest convenience store chain, hopes to boost pay by 2 percent to 3 percent, Chief Executive Officer Takeshi Niinami said last month. Salary increases are “essential” for Japan, Niinami said in an interview on Oct. 9.