The chairman of the Japan Automobile Manufacturers Association said Friday that the increasing number of Japanese vehicles in the U.S. auto market is unlikely to rekindle trade friction between Tokyo and Washington.

“The U.S. market remains strong, and unemployment there is not on the rise,” said Yoshihide Munekuni, who is also chairman of Honda Motor Co.

U.S. carmakers have been growing increasingly frustrated as Japanese auto firms take a greater share of the U.S. car market.

But Japanese and U.S. companies have been bolstering bilateral relations through closer capital tieups, Munekuni said, adding there is a need for companies to strengthen dialogues.

Commenting on wage talks between labor and management this spring, Munekuni welcomed the fact that most companies offered no pay-scale increases beyond regularly scheduled yearly pay hikes.

“Japan’s labor costs are too high,” he said, adding that both management and labor should study whether Japanese firms can maintain international competitiveness while paying high labor costs.

Munekuni also said he believes the Japanese auto industry is resilient enough to deal with the sluggish demand at home. “I’m not pessimistic,” he said.

He said he plans to urge the government to deliver tax breaks to promote research and development and make necessary legal frameworks to protect intellectual property rights.

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