In order to boost consumer sentiment it is important to dispel consumers' deflationary mindset and anxiety about the future. We must also exercise ingenuity in getting consumers excited about the prospect of shopping and travel. Accordingly, the public and private sectors are working together to implement the "Premium Friday" campaign, which encourages consumers to finish work early on the last Friday of each month to spend time doing something a little special. Premium Friday addresses the two issues of stimulating consumption and reforming work styles by suggesting a new lifestyle.
Companies have come up with a diverse range of business ideas to take advantage of the first Premium Friday on February 24. Not only in Tokyo, but also elsewhere in Japan, they are bringing out distinctive products, including domestic travel packages that make more effective use of the weekend by departing on Friday afternoon.
One of Premium Friday's other objectives is to facilitate a flexible working style. Keidanren already urges all its members to enable employees to finish work earlier than usual on the last Friday afternoon of each month—preferably by 3 p.m. at the latest—by encouraging employees to take paid leave and making use of flextime systems. This has prompted an increasing number of companies to tackle work style reform in line with their own particular circumstances. The government is also keeping pace with efforts in the private sector by advising all ministries and agencies to encourage employees to leave work early on Premium Fridays.
We intend to continue implementing the Premium Friday campaign in March and thereafter with the aim of eventually establishing it throughout the country as a popularly observed event like Christmas or Halloween. Of course, Premium Friday has not yet reached all regions of Japan and we need to inspire real enthusiasm for the idea not only among companies, but also throughout society in general. We are therefore very keen for the media to actively cover the campaign.
Working Style Reform
We are not yet at the stage where the government has indicated a specific limit on the number of overtime hours an employee can work, but 100 hours per month seems an appropriate maximum level. This is the level at which work-related injury may be officially acknowledged and any level of work beyond this makes it difficult to be absolutely sure that death by overwork (karoshi) does not occur. The existing "36 Agreement" permits unrestricted overtime work provided it is agreed upon by labor and management. First of all, therefore, it is essential to limit overtime to 100 hours or less per month. Prime Minister Abe recently stated that he intends to set an upper limit after securing agreements between labor and management. If necessary, labor-management discussions will be held.
Keidanren supports the idea of establishing an upper limit, but the following three points should be noted as key premises for such action. First, Japan's diligent company employees and their long working hours have underpinned our industrial competitiveness. An overtime limit that fails to take that reality into account therefore risks harming companies' ability to compete. The second point is that large companies have many employees, so they can probably cope with limited overtime but the same cannot be said of SMEs and microenterprises. It would be impossible for them to manage or operate their businesses if, in addition to having few employees in absolute terms, they cannot secure personnel they need due to the current labor shortage and they then become subject to an overtime limit that does not take those difficulties into account. The third point is the risk that if the limit is too stringent, it will result in excessive workloads for managerial personnel, who are exempt.
There are, moreover, other issues: the so-called interval regulations that stipulate a minimum rest period between work days, and exceptions to the upper overtime limit. The business community has expressed its opposition to interval regulations, and exceptions to the upper overtime limit must be considered with due attention to the circumstances in different industries and business categories.
President Trump's policies offer cause for both hope and concern. Hope can be found in policies designed to promote industry, such as tax cuts, infrastructure investment, and deregulation; market sentiment is also positive and stock prices are reaching historically high levels. If the US economy grows, it is likely to have a beneficial effect on the Japanese economy and the global economy. There is cause for concern, however, in the move toward protectionism, specifically with regard to US withdrawal from the Trans-Pacific Partnership (TPP) and the plan to renegotiate NAFTA.
The recent Japan-US summit talks were extremely significant in a number of ways. One achievement was the fact that Prime Minister Abe and President Trump were able to establish a personal relationship of trust. Another was that the Japan-US Alliance was firmly positioned as the cornerstone of peace, prosperity, and freedom in the Asia-Pacific region. It was also reaffirmed in writing that Article 5 of the Japan-US Security Treaty applies to the Senkaku Islands. The summit talks were therefore very successful from a diplomatic perspective. From an economic perspective too, the two leaders agreed to make free and fair rules the basis for strengthening economic relations between Japan and the United States, as well as among countries in the Asia-Pacific region, thereby leading the global economy. Thus a new high-level framework for Japan-US economic dialogue was established. We are hopeful that this will also pave the way for reviewing the decision to withdraw from the TPP.
The Toshiba Issue
Toshiba is one of Japan's most distinguished companies. The recent problems are all the more disappointing because we were expecting the company to make a fresh start after its previous accounting scandal. Apparently there was inadequate internal control at Toshiba's subsidiary, but we would like Toshiba to conduct a thorough investigation and confirm its financial results. In addition, we would like Toshiba to recover the markets' trust as soon as possible by creating failsafe systems for preventing any reoccurrence of the problems.
Toshiba states that it will sell its semiconductor operations, but semiconductors are an important and sensitive core technology for Japan. In addition, Toshiba has some of the world's best semiconductor specialists. It would be problematic in terms of our national security and interests if this technology and associated personnel were to flow out of Japan, so something must be done to prevent such an eventuality.