27 Dec 2013
Flash: When will Japanese wages start to rise for real? - Nomura
FXstreet.com (Bali) - Japanese wages are unlikely to enter a full-fledged recovery phase until FY15 or later, notes Nomura.
Key Quotes
"Full-fledged increase to come after elimination of the dampening effect on scheduled cash earnings of a rising ratio of part-time workers."
"As we have discussed already, we do not expect a full-fledged increase in wages to occur before FY15."
"We think the improvement in corporate earnings is likely to lead to (a) a rise in wages resulting from growth in cash earnings other than scheduled cash earnings and (b) a rise in wages resulting from an increase in scheduled cash earnings stemming from an increase in base pay."
"We think these will contribute to increases in wages in FY14. However, these will be reduced by (c) downward pressure on scheduled cash earnings resulting from an increase in the ratio of part-time workers and we think total cash earnings in FY14 will only go up about 0.5% y-y. We think wages will increase about 1% y-y in FY15."
Key Quotes
"Full-fledged increase to come after elimination of the dampening effect on scheduled cash earnings of a rising ratio of part-time workers."
"As we have discussed already, we do not expect a full-fledged increase in wages to occur before FY15."
"We think the improvement in corporate earnings is likely to lead to (a) a rise in wages resulting from growth in cash earnings other than scheduled cash earnings and (b) a rise in wages resulting from an increase in scheduled cash earnings stemming from an increase in base pay."
"We think these will contribute to increases in wages in FY14. However, these will be reduced by (c) downward pressure on scheduled cash earnings resulting from an increase in the ratio of part-time workers and we think total cash earnings in FY14 will only go up about 0.5% y-y. We think wages will increase about 1% y-y in FY15."