Japan Business Lobby Publishes Need for Pay-scale-rises

The Japan Business Federation on Wednesday accepted the need for pay-scale hikes in its annual labor policy report for the first time in six years on the back of the nation’s economic recovery.

Japan’s biggest business lobby, known as Keidanren, said, “Companies with solid business performances should consider distributing increased profits not only for capital investment but the expansion of employment and wage hikes.”

“A basic wage hike was inconceivable last year,” but this year, “responding in a way different from the past several years would be an option,” said a Keidanren official at a press conference in Tokyo.

The Japanese Trade Union Confederation, or Rengo, the country’s largest umbrella body for labor unions, has decided to demand pay-scale hikes of at least 1 percent at the annual labor-management wage talks in spring.

In the report, Keidanren said the wage hikes include pay-scale and regular annual salary rises as well as lump-sum allowances, noting each company will decide whether to raise wages depending on its circumstances.

The move comes after Prime Minister Shinzo Abe urged companies to raise wages to mitigate any possible adverse impact from the sales tax hike to 8 percent in April from the current 5 percent.

Japan’s three megabanks, the Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corp., are considering raising basic wages this year for the first time since 1995 on the back of their solid performances stemming partly from sharp stock gains.

via Mainich

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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