Improved corporate performance – reflected in stock price increases, etc.
There seems to be a justification for lifting negative interest rates.
Japanese media reported on the 8th that the union under Rengo, Japan’s largest labor union organization, requested an average wage increase of 5.85% in this year’s wage negotiations. This is the first time in 30 years that Japanese unions have requested a wage increase of more than 5% since 1994 (5.4%).
Major Japanese conglomerates will respond to the union’s demands by the 13th of this month, the ‘intensive response date’. Small and medium-sized businesses usually negotiate after the large company’s wage negotiations have ended. Japanese companies generally tend to accept wage increases at a level that does not significantly deviate from union demands.
If wage increases are realized, the Japanese government’s policies may also change. If wages rise significantly as the union demands, the Bank of Japan, the central bank, will have justification to lift the world’s only ‘negative interest rate’. The Japanese government, which is preparing to declare an escape from deflation (falling prices amid an economic recession), may also accelerate its movements.
Contrary to the term ‘spring struggle’, in Japan, wage negotiations have been carried out peacefully without any significant confrontation for a long time. In the past 10 years, the government has actively requested wage increases from the business community, leading to the term ‘government-run spring struggle’. Japanese Prime Minister Fumio Kishida also said at a tripartite meeting early this year, “We request a wage increase that exceeds last year.” In last year’s spring struggle, Rengo-affiliated unions demanded an average wage increase of 4.49%, and the final average wage increase rate was 3.58%.
Japanese companies believe that wage increases are inevitable based on improved performance and rising stock prices due to the prolonged weak yen. According to a survey conducted by Tokyo Commerce Research on 870 companies in Tokyo, 82.5% plan to increase wages this year.
Tokyo =
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.