With the economy in its second recession since Abe took office, the appeals to big business to share more of its wealth have gained urgency.
“This issue comes down to a chicken and egg situation,” Kuroda told business leaders Monday in Nagoya, the heart of Japan’s thriving auto industry.
“Taking actions now is a prerequisite for firms to be among the winners in the future,” said BOJ Gov. Haruhiko Kuroda, arguing that companies could afford to weather a slight downturn given their recent “extremely high” profits.
Katsunobu Kato, an Abe ally who recently was appointed to head his campaign to counter the falling birth rate, voiced a similar appeal.
“There is a limit to what government can do. We are expecting the private sector to help,” said Kato, who is tasked with ensuring the country’s population does not fall below 100 million, from the current 126 million.
Kato also acknowledged that the ambitious reforms Abe has proposed will take “a fair amount of time.”
In the meantime, he urged companies to raise wages faster, increase permanent hiring of temporary workers, and invest more at home rather than in foreign factories and acquisitions, to ensure a “positive economic cycle led by private-sector demand.”
China’s slowdown has reverberated in Japan, contributing to a 0.8 percent contraction in GDP in the July-September quarter.
The government said last week it will draft a supplementary budget and provide cash handouts to pensioners to help spur consumer spending.