Japanese Prime Minister Shinzo Abe voiced hope Friday that wage hikes by companies would lead to an exit from deflation as pursued by the government and the Bank of Japan.
“I expect that moves to increase wages will spread in the entire business circle and lead to an exit from deflation,” Abe told a meeting of the Council on Economic and Fiscal Policy.
At the gathering, private-sector members of the government panel called on the government to hold discussions for realizing wage hikes in spring wage negotiations next year, arguing consecutive wage increases would bring an end to deflation.
The meeting came after government data showed Japan’s core consumer price index fell 0.5 percent in August from a year earlier for the sixth straight monthly decline.
Council members from academic and business circles welcomed the central bank’s “comprehensive assessment” on its large-scale monetary easing policy, saying it was “significant” for the BOJ to hold dialogue smoothly with markets.
The members called on the BOJ to explain thoroughly its policy intention to the markets, and also urged the government to boost efforts to advance structural reforms to enhance productivity, including labor reforms.