3 Sep 2013
Abenomics squeezing Japan's workers
FXstreet.com (Barcelona) - As the series of CPI readings in Japan continue to accelerate at the fastest rate since 2008, there is a darker and different reality on Japanese wages, which appear to be in disconnect with the latest uptick in price levels.
Yesterday, it was known that Japan salaries remain in a downward trend, as regular wages excluding overtime and bonuses dropped 0.4 percent from a year earlier -14th month in a row of decline - according to data released today by the Ministry of Health, Labour and Welfare, Bloomberg reports.
The combination of depressed salaries coupled with evidence of prices levels picking up, the April 2014 sales-tax hike, which looks set to be implemented as planned, could represent a major setback for the Japanese economy, which raises the odds of the BoJ eventually having to intervene through more easing, a Yen negative event.
Bloomberg quoted Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo, saying: “Companies aren’t confident enough on the sustainability of the economic recovery", adding that "If wages don’t improve much, it may pose a political risk to Abe’s administration." Japan's Economy Minister Mr. Amari also crossed the wires, to reassure that “We will make an environment in which companies will have enough confidence to raise wages."
Yesterday, it was known that Japan salaries remain in a downward trend, as regular wages excluding overtime and bonuses dropped 0.4 percent from a year earlier -14th month in a row of decline - according to data released today by the Ministry of Health, Labour and Welfare, Bloomberg reports.
The combination of depressed salaries coupled with evidence of prices levels picking up, the April 2014 sales-tax hike, which looks set to be implemented as planned, could represent a major setback for the Japanese economy, which raises the odds of the BoJ eventually having to intervene through more easing, a Yen negative event.
Bloomberg quoted Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo, saying: “Companies aren’t confident enough on the sustainability of the economic recovery", adding that "If wages don’t improve much, it may pose a political risk to Abe’s administration." Japan's Economy Minister Mr. Amari also crossed the wires, to reassure that “We will make an environment in which companies will have enough confidence to raise wages."