18 Feb 2015
Japanese Real wages might see an upside risk – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura, forecasts Japanese Real Wage to register an above consensus growth at 1.1% FY 15 from the 1.3% decline in FY 14.
Key Quotes
“According to data from a survey by the Japan Business Federation (Keidanren), last year's increase in basic wages was 0.3%, while the figure from a survey conducted by the Japanese Trade Union Confederation (Rengo) was 0.38%.”
“This year's negotiations have already begun at many major companies. Many employers have told the trade unions that they will respond to their demands in mid-March."
“According to a poll of 157 senior executives by the Institute of Labor Administration, 35.7% are prepared to increase their employees' basic wages this year, compared with 16.1% last year. Because, according to the same poll, 51.0% of companies actually increased their employees' basic wages last year, the percentage this year is likely to be higher.”
“Assuming that the increase in the seniority pay portion in FY15 is the same as in FY14, we estimate that the increase in basic wages in FY15 will be just over 0.4% on the basis used by the Keidanren and 0.5% on the basis used by Rengo.”
“…we forecast that scheduled cash earnings will rise 0.7% in FY15 and 1.0% in FY16. The latter figure assumes a 0.7% increase in basic wages.”
“We also forecast that nominal total wages in FY15 will increase 1.5%, a slight decrease from 1.7% in FY14.”
“However, because inflation is likely to be much lower as a result of postponing the planned increase in the consumption tax, we forecast that real total wages will grow 1.1% in FY15, compared with a decline of 1.3% in FY14.”
Key Quotes
“According to data from a survey by the Japan Business Federation (Keidanren), last year's increase in basic wages was 0.3%, while the figure from a survey conducted by the Japanese Trade Union Confederation (Rengo) was 0.38%.”
“This year's negotiations have already begun at many major companies. Many employers have told the trade unions that they will respond to their demands in mid-March."
“According to a poll of 157 senior executives by the Institute of Labor Administration, 35.7% are prepared to increase their employees' basic wages this year, compared with 16.1% last year. Because, according to the same poll, 51.0% of companies actually increased their employees' basic wages last year, the percentage this year is likely to be higher.”
“Assuming that the increase in the seniority pay portion in FY15 is the same as in FY14, we estimate that the increase in basic wages in FY15 will be just over 0.4% on the basis used by the Keidanren and 0.5% on the basis used by Rengo.”
“…we forecast that scheduled cash earnings will rise 0.7% in FY15 and 1.0% in FY16. The latter figure assumes a 0.7% increase in basic wages.”
“We also forecast that nominal total wages in FY15 will increase 1.5%, a slight decrease from 1.7% in FY14.”
“However, because inflation is likely to be much lower as a result of postponing the planned increase in the consumption tax, we forecast that real total wages will grow 1.1% in FY15, compared with a decline of 1.3% in FY14.”