Prime Minister Shinzo Abe and Bank of Japan Gov. Haruhiko Kuroda piled pressure on the country’s business leaders Thursday, urging them to lift wages to help boost the economy.
For the seventh straight year, Abe told a year-end gathering of business lobby Keidanren he hoped companies would boost wages during the annual shuntō wage negotiations in spring.
“What’s important is investing in people,” Abe said. “Since I’ve been mentioning this every year, I’ll refrain from emphasizing it too much but I have high hopes for next year.”
Japan’s weak wage growth has been a hurdle to long-term price gains. Wages rose an average 2.1 percent at the spring talks this year, according to figures released by the Japanese Trade Union Confederation. That’s well short of the 3 percent mark economists say is the minimum needed to help drive inflation toward 2 percent.
Kuroda, speaking after Abe, weighed in, saying he hoped that companies’ wage and price setting stances improve and that moderate gains in both would also be advantageous for them.
He has repeatedly said that the positive cycle of wage and price growth the central bank is striving for lacks strength. The BOJ maintained its policy stance in the latest December meeting.
This month Abe announced a stimulus package amounting to around ¥26 trillion ($239 billion) spread over the coming years, with fiscal measures valued at around half that figure to aid disaster relief, protect against downside economic risks and prepare the country for what comes after the 2020 Tokyo Olympics.
“Just so you are aware, I understand wages rose 12 percent in the year the Tokyo Olympics were held about half a century ago,” Abe noted, referring to the 1964 games.