Japan’s wages fell at the fastest pace on record in June as companies cut bonuses to protect dwindling profits, adding to evidence that consumers are unlikely to contribute to an economic recovery.
Monthly wages, including overtime and bonuses, dropped 7.1 percent from a year earlier to ¥430,620 (US$4,500), the sharpest decline since the survey began in 1990, the Labor Ministry said yesterday in Tokyo. Bonuses shrank 14.5 percent.
Companies from Sharp Corp to Sony Corp are posting losses amid the country’s worst postwar recession. The unemployment rate rose to a six-year high of 5.4 percent in June, weighing on households, whose outlays account for more than half of the economy.
“Japan’s recovery will be very weak because it won’t get any support from consumer spending,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co in Tokyo.
“The pressure for wage cuts is strong and it’ll get even stronger as companies face excesses” of labor and production, he said.
The decline in paychecks was the 13th in a row, the longest losing streak in six years, underscoring concern that deflation may again be taking hold in the world’s second-largest economy. Consumer prices, excluding fresh food, slid a record 1.7 percent in June from a year earlier.
Summer bonuses in Japan are typically paid in June or July and represent about 10 percent of a fulltime worker’s annual income.
Employees were at least able to work more overtime in June as companies increased output to replenish inventories and meet a pickup in overseas demand. Overtime hours among manufacturers rose in June from May, the third monthly gain, the report said.
Industrial production surged 8.3 percent last quarter from the first three months of the year, the biggest jump since 1953. Exports gained in June from a month earlier.
“Exports and production bottomed out in February, but as long as cost-cutting pressure remains intact, it is hard to see non-manufacturers and households entering a process of self-sustained recovery,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo.
Sharp, Japan’s largest maker of liquid-crystal displays, last week reported a third straight quarterly loss on slumping sales of LCD panels. Sony, which is cutting 16,000 staff worldwide, posted its second loss in a row.
Japanese are crimping on travel this summer. The average vacation budget dropped 18 percent from last year to ¥88,000 a person, the lowest in four years, Dentsu Research Inc reported last week. The number of Japanese tourists will fall 1.7 percent, JTB Corp, the nation’s largest travel agency, said last month.
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
When she was in fifth grade, Scarlett Goddard Strahan started to worry about getting wrinkles. By the time she turned 10, she and her friends were spending hours on ByteDance Ltd’s TikTok and Google’s YouTube watching influencers tout products for achieving today’s beauty aesthetic: a dewy, “glowy,” flawless complexion. Goddard Strahan developed an elaborate skin care routine with facial cleansers, mists, hydrating masks and moisturizers. One night, her skin began to burn intensely and erupted in blisters. Heavy use of adult-strength products had wreaked havoc on her skin. Months later, patches of tiny bumps remain on her face, and her cheeks turn
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a