TOKYO: Some of Japan's top companies announced their lowest wage hikes in years on Wednesday (Mar 15), marking the latest challenge for Tokyo's bid to boost spending and the economy.
Toyota, which employees nearly 350,000 in Japan, offered a base pay hike of ¥1,300 (US$11) per month for the fiscal year starting in April, the lowest in four years and down from a ¥1,500 bump in 2016.
The offer came as major Japanese firms, including Nissan, Hitachi and Panasonic, announced pay offers following yearly union negotiations known as Shunto, or "the spring offensive".
"There is a strong possibility that the pace of wage hikes among big firms will be the slowest in four years," Hisashi Yamada, chief economist at Japan Research Institute, told AFP.
The tepid wage bumps are a setback for Prime Minister Shinzo Abe and his bid to boost Japan's economy with a plan dubbed Abenomics, rolled out in early 2013.
Japan has been struggling to reverse a years-long deflationary spiral of falling prices and lacklustre growth.
Tokyo has called on firms to boost wages so that consumers have more money to spend, in the hopes it will lift the world's number three economy.
"Current wage growth isn't strong enough to tackle deflation," Yamada said.
Despite healthy profits, cash-rich Japanese firms remain cautious about the world economy, partly due to uncertainty about US President Donald Trump's protectionist leanings could hurt exports, local media said.
Still, wages are on the increase, with Toyota offering an additional ¥1,100 to employees with kids.
Hitachi and Panasonic offered annual monthly wage increases of ¥1,000, below previous years, while Honda is giving employees a ¥1,600 hike, up from ¥1,100 last year.
The increases "don't mean Abenomics is a failure since wages hikes are still happening"," Yamada said.