Japanese Business Leaders Strive for Higher Pay Amid Political Pressure

06 Jan, 2024

Japanese business leaders, including Masakazu Tokura, Chairman of the Japan Business Federation (Keidanren), are committed to advocating for substantial pay raises this year.

Prime Minister Fumio Kishida urged these leaders to surpass last year's wage hikes, aligning them with the escalating prices. Tokura emphasized their intensified dedication to resolving wage issues and seizing a unique opportunity to break free from deflation.

In 2023, major Japanese companies recorded a remarkable 3.99% average wage increase, marking the most significant surge in 31 years. Tokura, anticipating improved outcomes in the upcoming spring negotiations, voiced optimism. Kishida, addressing the event attended by top executives, emphasized the critical role of increased disposable income in fostering a positive cycle of economic growth through wage hikes.

Takeshi Niinami, Chairman of the Japan Association of Corporate Executives, asserted that major firms must exceed a 5% wage increase to benefit smaller businesses. Niinami urged the normalization of wage hikes, deeming this year as the litmus test for sustained increases. Tomoko Yoshino, head of Rengo, echoed this sentiment, advocating for over 5% wage hikes and pledging to build momentum for larger increases.

The Bank of Japan closely monitors these negotiations, considering them crucial to potentially revising its negative interest rate policy. Tokura stressed the need for approximately a 2% price increase to support sustainable wage growth, urging the BOJ and government to implement moderate financial and fiscal policies. The determination of Japanese business leaders reflects a pivotal moment in steering the country towards economic revitalization.

Related News

Interview