• Kyodo

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Nearly 30% of respondents in a private-sector survey said their summer bonuses fell from last year, indicating that more Japanese people are feeling the pinch of the coronavirus pandemic hurting corporate earnings.

The percentage of people reporting falling bonuses rose sharply last year to 30.1% and stayed at 27.6% this year, the online survey by Nippon Life Insurance Co. showed. The corresponding figure for 2019 before the pandemic was 14.3%.

Reflecting the severity of a hit to service providers, 38.5% of respondents in the transport and postal services sector said their bonuses decreased, followed by 35.5% in the sector offering entertainment and other services related to life events such as marriage. The manufacturing industry, which had the largest percentage of people experiencing bonus cuts, came in third at 33.7%.

Summer bonuses averaged ¥564,000 ($5,120), up from ¥554,000 a year ago. But the figure was still lower than an average 610,000 in 2019 before the pandemic, according to the survey covering 9,073 respondents between June 1 and 14.

The spread of the novel coronavirus has depressed economic activity globally, affecting both manufacturers and nonmanufacturers. In recent months, economist have pointed to the gap in the pace of recovery between manufacturers, benefiting from rising external demand in nations like China and the United States, and nonmanufacturers still reeling as Japan is struggling to curb coronavirus infections.

A fourth state of emergency will be in place for Tokyo from Monday to Aug. 22, during which the Tokyo Olympics will be held without either domestic or foreign spectators.

When asked about how they would spend their bonuses besides saving for the future, 26.2%, the largest portion, said part of the money would be used to cover living expenses, ahead of 19.8% who would buy something they want, the survey showed. Before the pandemic in 2019, taking domestic trips topped the list.

“It’s clear that corporate earnings have been recovering, mainly among manufacturers, on the back of rebounding overseas economies. Bonuses reflect earnings results with a lag so it will take more time to start rising,” said Yasuhide Yajima, chief economist at the NLI Research Institute, a think tank under Nippon Life Insurance.

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