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Japan Times
07-06-2025
- Business
- Japan Times
Japan highlights wage hikes as cornerstone of economic growth strategy
Japan's government has highlighted wage hikes as a cornerstone of its economic growth strategy, according to a draft of its planned basic policy on economy, public finances and reform. In the draft submitted at a meeting of the Council on Economic and Fiscal Policy on Friday, the government said that the three decades of the country's cost-cutting economy is coming to an end. Seeing wage hikes as a key part of its growth strategy, the government vowed to realize pay raises that exceed price increases in a stable way. The government aims to gain Cabinet approval in mid-June for the first such basic policy under Prime Minister Shigeru Ishiba's administration, launched in October last year. "We'll do everything we can to prepare for immediate risks while beefing up the growth potential of both the Japanese economy across areas throughout the country, in order to ensure that we transition into a growth-oriented economy without falling back into deflation," Ishiba told the meeting. In the draft, the government effectively pushed back its target for achieving a primary budget surplus to fiscal 2025-2026. The target of turning the primary balance at the central and local governments into a surplus had been set at fiscal 2025 since fiscal 2018. The government said that it will seek to boost take-home pay through wage hikes, not through tax cuts. The draft includes a target of stably achieving annual real wage growth of about 1% in the Japanese economy as a whole over the five years to fiscal 2029. Aiming to help secure funding to raise wages at smaller companies, which employ about 70% of all workers in Japan, the government will promote its five-year plan on the issue. Under the plan, the government will ensure that the public and private sectors invest about ¥60 trillion to enhance productivity, according to the draft. Individual support will also be given to 12 industries facing serious labor shortages, such as the restaurant and accommodation sectors. The government promised to continue efforts to raise minimum wages so that the national average will reach ¥1,500 by the end of the 2020s. The envisaged establishment of a disaster management agency, a key policy of the Ishiba administration, is eyed for fiscal 2026, the government said. The new body will serve as a command center for the country's disaster reduction and response efforts. It will have a dedicated minister and the authority to issue recommendations to other government agencies. To tackle soaring rice prices, the government pledged to implement comprehensive measures, including steps to facilitate the distribution of government-stockpiled rice. It also vowed to review its paddy field policy in details to secure a stable food supply.
06-06-2025
- Business
Wage Hikes Cornerstone of Japan Economic Growth Strategy: Govt
News from Japan Society Jun 6, 2025 21:26 (JST) Tokyo, June 6 (Jiji Press)--The government highlighted wage hikes as a cornerstone of Japan's economic growth strategy, in a draft of its planned basic policy on economy, public finances and reform presented Friday. In the draft submitted at a meeting of the Council on Economic and Fiscal Policy, the government said that the three decades of the country's cost-cutting economy is coming to an end. Seeing wage hikes as a key part of its growth strategy, the government vowed to realize pay rises that exceed price increases in a stable way. The government aims to gain cabinet approval in mid-June for the first such basic policy under Prime Minister Shigeru Ishiba's administration, launched in October last year. "We'll do everything we can to prepare for immediate risks while beefing up the growth potential of both the Japanese economy across areas throughout the country, in order to ensure that we transition into a growth-oriented economy without falling back into deflation," Ishiba told the meeting. [Copyright The Jiji Press, Ltd.] Jiji Press
The Mainichi
06-06-2025
- Business
- The Mainichi
Japan vows to achieve wage-driven growth in draft policy blueprint
TOKYO (Kyodo) -- The Japanese government has pledged to pursue economic growth driven by sustainable wage hikes, aiming to nearly double gross domestic product by around 2040, according to a draft policy blueprint unveiled Friday. Facing uncertainty from higher U.S. tariffs and prolonged inflation weighing on household spending, Prime Minister Shigeru Ishiba's government vowed in its draft economic and fiscal policy plan to achieve wage increases that outpace rising prices. The blueprint, whose draft was presented to the Council on Economic and Fiscal Policy on Friday, is set to be finalized next week. Once adopted, it will serve as the basis for the government's budget and tax reform proposals for the next fiscal year. Amid mounting concern about Japan's fiscal health, the worst among advanced economies, the Ishiba administration will continue striving to maintain market confidence, the draft said, with interest rates on longer-term government bonds on an upward trend. But the timeline for attaining a surplus in the primary balance -- annual tax and nontax revenues minus spending other than debt-servicing costs -- was pushed back from fiscal 2025 to sometime between that year and fiscal 2026 through March 2027. On the U.S. tariffs under President Donald Trump, the draft said the levies pose downside risks to Japan's export-reliant economy, as they could eventually dampen corporate and consumer sentiment, dragging down consumption and investment. While negotiations are ongoing to urge the United States to review its trade policies, the Japanese government will implement measures to mitigate the negative impact on the broader economy, including support for corporate financing, the draft said. As the country's working-age population is shrinking, the government promised to secure economic growth of about 3 percent, which would lead to GDP of 1,000 trillion yen ($7 trillion) by around 2040, up from its current level of 600 trillion yen. To steadily deliver annual inflation-adjusted wage expansion of around 1 percent across Japan, the government said it will shore up small and mid-sized companies by helping them pass rising costs on to clients and strengthen their business foundations.
Reuters
28-05-2025
- Business
- Reuters
Japan's government to pledge 'nimble' fiscal action in policy guidelines
TOKYO, May 28 (Reuters) - Japan's government will pledge in this year's policy guidelines to take "nimble policy action" as U.S. tariffs and high inflation impact household finances, according to a draft seen by Reuters. The statement, to be included in Japan's annual economic and fiscal policy guidelines in June, suggests the government could consider compiling a supplementary budget later this year, depending on economic and price developments. The government also plans to reiterate its expectations for the Bank of Japan to achieve the 2% price target in a sustainable and stable manner. The draft guidelines, which form the basis for budget planning, will note that, although the Japanese economy has been recovering modestly, downside risks posed by the U.S. tariffs and rising consumer prices "need to be closely monitored." The pursuit of fiscal discipline should not narrow policy options, the draft said, giving room for swift policy responses such as stimulus measures when necessary. The government will mobilise all measures to achieve wage growth to ensure the transition to a growth-oriented economy driven by wage hikes and investment, the draft said. The draft stated the BOJ is expected to achieve the 2% inflation target in a sustainable and stable manner through appropriate monetary policy in response to economic, price, and financial conditions. A key Japanese government economic panel, the Council on Economic and Fiscal Policy (CEFP), will meet on June 5 to discuss the draft guidelines and finalise them on June 13.
26-05-2025
- Business
Japan Govt to Aim for 1 Pct Real Wage Growth
News from Japan Economy May 26, 2025 23:43 (JST) Tokyo, May 26 (Jiji Press)--The Japanese government on Monday released an outline of the basic economic and fiscal policy guidelines that it will adopt in June, including a target of achieving price-adjusted real wage growth of around 1 pct per year. The outline, presented at a meeting of the Council on Economic and Fiscal Policy, chaired by Prime Minister Shigeru Ishiba, calls for realizing a growth-oriented economy based on wage increases. Amid uncertainties over the global economy due to U.S. President Donald Trump's tariffs, Ishiba said at the meeting, "We'll work to prevent the trend of increasing wages and investments from stopping." He said the government will focus on helping small businesses improve productivity and pass costs onto prices under a five-year program. Meanwhile, private-sector members of the council, in their recommendations, described U.S. tariffs as "the biggest downside risk" to the economy and voiced concern that companies could refrain from capital investments due to heightened uncertainty. [Copyright The Jiji Press, Ltd.] Jiji Press
