Japan PM Pledge to Guarantee Wage Hikes to Protect Workers from Global Inflation

Prime Minister of Japan Fumio Kishida, vowed on Monday to guarantee workers' wage hikes through tax breaks to protect the Japan’s economy from the impact of rising global inflation and to achieve a virtuous cycle of economic growth and wealth distribution.

Kishida made the pledge on the opening day of parliament's extra session held to debate a supplementary budget with a record 36 trillion yen ($318 billion) in spending to bolster the blow from the COVID-19 pandemic.

He also pledge to restore the economy and then tackle fiscal reform, saying the order must not be put wrong.

Kishida said that as anxiety has grown rising global inflation may have ripple effects on Japan, I will do the utmost to (realize) wage hikes in order to protect the Japanese economy.

"When we urge private-sector firms to raise pay, we must create a virtuous cycle of wage hikes and corporate growth to enable sustainable wage hikes."

Kishida vowed to lay the groundwork to help private-sector firms hike wages by strengthening taxation and give bold deductions for companies that raise pay. Following a solid election win in October, Kishida has pushed a strategy of "new capitalism" targeting growth and wealth distribution, after eight years of "Abenomics" stimulus policy led by former prime minister Shinzo Abe failed to stoke trickle-down effects in the world's third largest economy, Reuters mentioned.

©Photo: Bloomberg