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7 Jan 2015
Japan: Wage negotiations into FY2015 to watch - Nomura
FXStreet (Bali) - Prime Minister Abe continues putting pressures on Japanese firms to increase wages, notes Nomura, adding that Abe remains confident that the corporate tax cuts will lead to wage increases.
Key Quotes
"Prime Minister Abe continues putting pressures on Japanese firms to increase wages, while suggesting corporate tax rate can continue declining if wage increases materialize."
"The government has already decided to lower the corporate tax rate by about 2.5% next fiscal year, and Prime Minister Abe said the corporate tax cuts will lead to wage increases."
"Negative impact of higher import prices owing to JPY weakness on households and SMEs was one of the important topics during the general election in December, but higher wages in FY2015 can decrease criticism of the JPY weakness."
"At the same time, at the latest speech, Governor Kuroda repeated that he hopes to see the impact of QQE on wage negotiations and price setting into FY2015. At the press conference after the previous BOJ meeting, Governor Kuroda emphasized the importance of wage negotiations in the next fiscal year."
"As expectations for wage increases remain strong, the BOJ may keep its positive inflation outlook into FY2015, even after the recent decline in oil prices. In this regard, positive wage negotiations may reduce market expectations for BOJ easing."
"The BOJ is scheduled to update its inflation forecast at the next meeting on 20-21 January and Kuroda‟s view on wage negotiations and the oil price decline at the press conference will be important for JPY."
Key Quotes
"Prime Minister Abe continues putting pressures on Japanese firms to increase wages, while suggesting corporate tax rate can continue declining if wage increases materialize."
"The government has already decided to lower the corporate tax rate by about 2.5% next fiscal year, and Prime Minister Abe said the corporate tax cuts will lead to wage increases."
"Negative impact of higher import prices owing to JPY weakness on households and SMEs was one of the important topics during the general election in December, but higher wages in FY2015 can decrease criticism of the JPY weakness."
"At the same time, at the latest speech, Governor Kuroda repeated that he hopes to see the impact of QQE on wage negotiations and price setting into FY2015. At the press conference after the previous BOJ meeting, Governor Kuroda emphasized the importance of wage negotiations in the next fiscal year."
"As expectations for wage increases remain strong, the BOJ may keep its positive inflation outlook into FY2015, even after the recent decline in oil prices. In this regard, positive wage negotiations may reduce market expectations for BOJ easing."
"The BOJ is scheduled to update its inflation forecast at the next meeting on 20-21 January and Kuroda‟s view on wage negotiations and the oil price decline at the press conference will be important for JPY."