Reuters Japan Corporate Survey:
- A third of Japanese companies see the labour shortfall worsening, and 4% believe the shortage is easing.
- Two-thirds of Japanese companies face severe impact from the labour shortage.
- A majority of Japanese companies see capital expenditure and wage hikes as this year’s priority investment areas
The Reuters survey highlights that two-thirds of Japanese companies are significantly affected by a shortage of workers, a problem driven by the country’s declining and aging population. Labour shortages are particularly severe among smaller firms and non-manufacturing sectors, with 66% of companies reporting serious impacts on their business.
As part of addressing such concerns, businesses are focusing on investments in wages and capital expenditures, aligning with the government’s push for economic growth through higher wages and greater investment.
Additionally, labour shortages and a weaker yen are pushing firms to raise prices. Nearly half of surveyed companies plan to increase prices in 2025 due to rising wage costs, transportation fees, and material expenses. This price pressure contributed to a 2.4% increase in Tokyo’s core consumer price index in December, fueling expectations of a potential interest rate hike.
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Earlier re Japan:
Yen update, JPY gaining since Ueda spoke yesterday:
