Japan's big manufacturers signal tentative willingness on wage hikes

Reuters ^ | 10/30/2013 | Yoko Kubota

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(Reuters) - Japan's big manufacturers, under pressure from Prime Minister Shinzo Abe to boost wages and create a "virtuous cycle" of growth to defeat deflation, are showing signs they are willing to raise workers' pay.

Abe's reflationary policies to stimulate spending and investment have boosted the fortunes of many corporations in Japan, which is now the fastest growing of the G7 rich nations.

Mitsubishi Motors Corp (7211.T), a second-tier automaker and key player in the Mitsubishi group of companies, sounded upbeat about the prospects for salary increases for its workers as it completes a decade-long recovery from deep losses.

"Up to now, everywhere in Japan we've done nothing but persevere and do without," the automaker's president Osamu Masuko told an earnings briefing this week. "It's really too bad for people these days. If we could do this for them, it would be great."

Masuko also said the company aims to resume dividend payments for the first time in more than a decade, while sources familiar with the matter say it is preparing to raise about $2 billion from a share issue to pay back a 2004 bailout.

Prime Minister Abe has recently been pressing big companies such as Toyota Motor Corp (7203.T) to go beyond one-off bonuses and increase base pay to help create a self-sustaining cycle of growth that could help pull Japan out of 15 years of deflation.

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