Japan’s Business Leaders Vow to Do Their Part to Help Nation Avoid Deflation

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.

via Mainichi

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