Japanese business leaders said Tuesday they will do their part to ensure that Japan emerges from years of deflation, as Prime Minister Shinzo Abe is stepping up calls for companies to raise wages and bolster capital expenditure.
The leaders of Japan’s three major business lobbies said they believe the economy will grow moderately in 2016, although concerns about China’s economic slowdown and rising tensions in the Middle East have led to a recent sell-off in global stocks.
“We need to do our utmost and pave the way (for Japan) to declare an end to deflation,” said Sadayuki Sakakibara, chairman of the Japan Business Federation, known as Keidanren.
Speaking at a press conference after a New Year’s celebration organized by Keidanren, the Japan Chamber of Commerce and Industry and the Japan Association of Corporate Executives, known as Keizai Doyukai, Sakakibara said he will encourage companies to approve increases in upcoming annual wage negotiations with labor unions.
Akio Mimura, chairman of the JCCI, said corporate managers “hold the key” to enabling Japan to emerge from deflation.
“When we look at consumption behavior and investment activities by companies, we see that we have yet to get out of deflation,” Mimura said.
The event, attended by more than 1,800 corporate leaders and others, was held at a time when Japan’s economic growth remains shaky as both consumer and capital spending lack vigor.
To put the world’s third-largest economy on a sustainable growth path, Abe, with his “Abenomics” economic policy package, has been urging companies that have posted record profits to raise wages.
“It’s a crucial year” for a virtuous circle of growth generated by Abenomics to become sustainable, Toyota Motor Corp. President Akio Toyoda told reporters at the event.