Major firms yesterday announced pay increases for workers after sustained pressure from the government in its bid to push up prices in deflationary Japan.
Japanese Prime Minister Shinzo Abe’s drive to get Japan economically ship-shape with a mix of easy money and fiscal largesse has born some fruit since its launch two years ago in the form of soaring stock prices and a falling currency.
However, stagnant salaries have been one of the main missing links in the “virtuous circle” of growth that the premier’s signature “Abenomics” plan envisages.
With deals from some of Japan’s biggest employers announced yesterday following the annual labor talks — known as shunto, or the “spring offensive” — it appeared the prime minister is at least partially getting his way.
The world’s biggest automaker, Toyota Motor Corp, said it would raise employees’ pay by an average of ¥4,000 (US$33) per month.
Toyota employees would also get an average bonus worth 6.8 months of their base wage — a common pay structure in Japan, the company said.
Last year, the company gave its first wage hike in six years.
Japan’s No. 2 automaker, Nissan Motor Co, agreed to give an even bigger raise of ¥5,000 per month, and a bonus worth 5.7 months of employees’ base wage, the company said.
“We have had thorough discussions on the very difficult challenge of becoming more competitive ... while contributing to sustaining a good economic cycle,” Toyota managing officer Tatsuro Ueda told reporters.
Major electronics firms, such as Panasonic Corp and Toshiba Corp, agreed to give a unified wage hike of ¥3,000 per month, bigger than last year’s ¥2,000.
Pay increases have taken on an extra significance since a precipitous sales tax hike in April last year dented the economy’s frail recovery.
The sales tax rise — Japan’s first in 17 years — slammed the brakes on consumer spending, plunging the economy into recession and throwing Abe’s growth-boosting program into question.
The plunge in the value of the yen, while helping exporters, reduced spending power at home because it made imports more expensive.
Official data have shown that Japanese household spending last year declined at its fastest pace in eight years, underscoring how badly clobbered the average Japanese felt.
Meanwhile, Japan’s trade deficit nearly halved year-on-year last month, as lower oil prices helped reduce the cost of imports, official data showed yesterday.
The monthly deficit came in at ¥424.6 billion, down 47.3 percent from a year ago, as exports in the month rose 2.4 percent to ¥5.94 trillion, while imports fell 3.6 percent to ¥6.36 trillion, it said.
SMBC Nikko Securities said that Japan’s overall exports would expand further mainly thanks to strong demand in the US market.
“The trade balance may swing back into the black as early as March and [Japan] will then expand its trade surplus,” the securities firm said in a note.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by