Abenomics Trickle Down Stops At Big Firms

Toyota Motor Corp (7203.T) is one of the conspicuous success stories of Japan’s radical efforts to revive its economy, with profits rebounding and its 60,000 workers in Japan hoping this year to receive their first base wage rise in six years.

But when the carmaker reports on Tuesday quarterly profits that are likely to be nearly five times what it booked a year ago, its continued revival will mask a much less optimistic mood among the auto industry’s smaller firms.

For them, the reflationary economic policies of Prime Minister Shinzo Abe, dubbed “Abenomics”, have failed to trickle down beyond the big carmakers, which are actually continuing to squeeze their networks of suppliers.

Pay rises are the last thing on their minds.

“Behind the recovery at the big carmakers is their pressure on suppliers to cut parts prices. It’s been hitting us like a body blow,” said a senior executive of a company that makes drivetrain-related parts for a major Toyota supplier.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza