JAPAN JOBLESS RATE AT 24-YEAR LOW
Economy posts seven straight quarters of growth for longest positive run in 16 years
TOKYO the longest positive run for 16 years — with the upcoming 2020 Olympic Games giving the economy a shot in the arm.
“Japan’s economy is expected to keep expanding through the first half of next year,” said Nomura Securities senior economist Masaki Kuwahara.
Confidence among Japan’s biggest manufacturers was also at an 11-year high, a key central bank survey showed earlier this month as the world’s numberthree economy picked up pace.
However, consumer spending has remained weak and deflation continues to stalk the economy.
Japan has battled deflation for many years and the central bank’s ultra-loose monetary policy appears to be having limited impact.
Other data showed yesterday that Japan’s consumer prices rose for the 11th straight month last month, but inflation was still far from the Bank of Japan’s (BoJ) two per cent inflation target seen as crucial to revive the world’s third-largest economy.
The core inflation rate was a 0.9 per cent rise year-on-year last month, according to data published by the internal affairs ministry, far below the two per cent target set by the BoJ.
Meanwhile, Prime Minister Shinzo Abe yesterday urged companies to raise wages by three per cent or more next year, keeping up pressure on firms to spend huge cash pile on wages to broaden the benefits of “Abenomics” stimulus policies.
“We must sustain and strengthen Japan’s positive economic cycle next year to achieve our long-standing goal of beating deflation,” said Abe at a meeting of Japan’s biggest business lobby Keidanren.
Wages at big companies had been rising slightly more than two per cent each year since 2014, government data showed, and an increase of three per cent or more next year would help BoJ to reach its elusive two per cent inflation target.
BoJ governor Haruhiko Kuroda said companies remained hesitant to raise wages because they had become accustomed to prioritising job security over wage hikes during 15 years of deflation.
Keidanren chairman Sadayuki Sakakibara made no reference to wages at the meeting, focusing instead on the need for Japan to get its fiscal house in order.
“We’d like to strongly call on the need to restore fiscal health”, as worries over the sustainability of Japan’s social welfare system could discourage consumers to spend, he said. Agencies