The disappointing result of the annual wage negotiations at Japan's leading companies concluded last week seems to highlight the limitations of the Abe administration's drive to prod firms to raise wages, and thereby hopefully boost consumer spending, through unusual government pressures on top corporate executives and its business-friendly policies such as corporate tax cuts.
Trend-setting major automakers and electronics firms cited uncertainty over their global business environment, such as slowing growth in China and other emerging economies, as they kept the raises in their employees' basic monthly pay scale at roughly half the level offered for their unions a year ago. The stock market turbulence since the beginning of the year, triggered by the global economic uncertainty, and the sudden rebound in the yen's exchange rate against the dollar appear to have clouded the prospects of the companies, whose profits have been pushed up to record levels aided by the weak yen under Prime Minister Shinzo Abe's trademark economic policies.
Toyota Motor Corp., the nation's top automaker, which expects its operating profit in the business year to March to hit a record ¥2.8 trillion, wrapped up the talks with its union with a ¥1,500 average hike in its monthly pay scale — compared with its record ¥4,000 last year. Toyota President Akio Toyoda said the "tide has changed" in the firm's business environment.
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