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BOJ Urges Corporations to Increase Investment

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.

via Mainichi [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
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
Alfonso Esparza

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