Reuters Corporate Survey: Most Japan firms heed PM Kishida's call to raise wages this year

More than half of Japanese companies, 53% to be exact, are planning to raise wages this year, according to a Reuters monthly poll. This meets a key request from Prime Minister Fumio Kishida to help workers cope with surging consumer prices, reported Reuters.

Also read: Japan’s PM Kishida calls on firms to give wage hikes that exceed inflation

Additional findings

Ahead of spring "shunto" labour negotiations, managers at 24% of the companies polled said they planned on across-the-board bumps in base salary along with regularly scheduled wage increases. Another 29% said they would carry out regular pay increases only, while 38% were undecided.

A total of 34% of firms said they planned wage increases of at least 3%, a jump from 10% in a Reuters survey in October.

The survey showed companies are less eager to bear the brunt of another Kishida plan: unprecedented military spending to counter growing threats from China and North Korea.

Among 495 firms polled, 54% supported the defence spending plan, but just 29% backed the increase in corporate tax rates.

Asked what expenses would be curtailed if corporate levies go up, the top answer was capital spending, at 42%, followed by dividends and wages.

On the overall business environment, corporate managers turned slightly more pessimistic, with 81% saying conditions would be "not so good" to "bad" in the next three months, compared with 77% in the December survey.

USD/JPY retreats

Following the news, USD/JPY fades the bounce off 127.57 while declining to 128.60 by the press time.