TOKYO (REUTERS) - Japanese exporters will hand out bigger bonuses for the next fiscal year as Prime Minister Shinzo Abe's policies drive the yen to multi-year lows, with Toyota Motor declaring its largest bonus payout since the global financial crisis. However, major companies, including Toyota and Panasonic, kept base salaries unchanged in the year ending March next year.
Since taking power in December, Mr Abe has been prescribing a mix of fiscal and monetary measures with an aim of lifting the economy out of two decades of deflation. The Prime Minister has also called for higher wages, seen crucial to boosting household expenditure, consumer prices and ultimately corporate earnings.
For the year ending March next year, Toyota plans to increase bonuses by about 270,000 yen (S$3,500) on average from a year earlier. In February, Toyota lifted its annual net profit guidance for the year to March by more than 10 per cent and said it expected its Japanese manufacturing business to be back in the black for the first time in five years.
Nissan Motor, Honda Motor and Fuji Heavy Industries also decided to raise bonuses while keeping wages unchanged.
"The bonus increase will have less effect on boosting private spending than a rise in base salary because people tend to save such temporary increases," said Mr Yasuo Yamamoto, a senior economist at Mizuho Research Institute in Tokyo. "It is the beginning towards a full-fledged recovery in private spending, but the economy needs to continue recovering to achieve that."
The scale of bonuses as announced by companies in Japan on Wednesday vary. Hitachi said it will raise its bonus payment by about 160,000 yen on average. For many other electronics makers, including Panasonic, which employs 128,000 staff in Japan, bonuses will depend on business results. They also kept wages unchanged.
An exception was retailer Seven & I Holdings, the owner of the 7-11 convenience store chain, which said this month it will increase base pay for about 53,500 employees.