Bonuses are still shrinking but at a slower rate

Summer bonuses this year are expected to average 407,900 yen, a 1.2 percent fall from last year, UFJ Institute Ltd. said Thursday.

The decline would be smaller than the preceding year's fall of 5.9 percent, the UFJ Holdings Inc.-affiliated think tank said.

"Although many companies have retained a harsh stance in limiting personnel expenses, moves among companies to stop cutting bonuses are likely to gain momentum, particularly among manufacturers," a UFJ Institute official said.

Bonuses from manufacturers are expected to average 469,300 yen, 0.2 percent larger than last year's and the first rebound in three years.

But the think tank warned all wage earners to brace for an average 10 percent cut in the actual sum of summer bonuses, which for the first time will be subject to withholdings by the state-run insurance and pension plans.

The think tank based the projections on an analysis that the profitability of companies improved on a pretax basis in the second half of fiscal 2002, with manufacturers in the vanguard.

But it said the average summer bonus at nonmanufacturers will probably fall 1.7 percent to 390,900 yen.