SINGAPORE - The economic reform strategy known as "Abenomics" has chalked up some solid achievements, though further progress has to be made, a Japanese state minister said on Wednesday.
Mr Yasutoshi Nishimura, a state minister in Japanese Prime Minister Shinzo Abe's cabinet, was in town to give local business leaders and finance professionals an update of how Abenomics has lifted the Japanese economy.
He noted, for example, that capital investments made by Japan's private sector rose 7 per cent between 2012 and last year, profits of Japanese-listed firms reached a record high of 21.3 trillion yen in March this year and the unemployment rate is now at an 18-year low of 3.3 per cent.
Japan has also introduced enhanced corporate governance measures to improve transparency and risk management at listed firms, implementing a new Corporate Governance Code in June this year.
Among the new measures is a requirement for such firms to hire independent external directors. Since the rules took effect, the proportion of listed firms that have such directors has risen to 87 per cent, from 47 per cent in 2013, Mr Nishimura said.
Their return on equity has also grown, from 5.8 per cent at the end of 2012 to 8.5 per cent in May 2015. Still, there is further room for improvement in the wider Japanese economy, Mr Nishimura said.
"We have seen wage increases but we want to see more nex t year and in following years," he said. "In particular, we want to see improvements in wages in small and medium enterprises or SMEs. They are suppliers to large companies. Payment terms to SMEs have to be improved so that wages for SME employees will be increased and consumption will be stimulated."