- Exchange Rate Trends
- Japan's Growth Strategy
- Japan-China Relations
- Discretionary Labor System
- Nissan Motor's General Meeting of Shareholders
- "Seiho Lady" Name Change
Exchange Rate Trends
(In response to a question about the impact of the yen's current weakness on prices and business activity, and what he would like to see in fiscal and monetary policy) I understand that recent movements in the foreign exchange market are largely being driven by short-term speculators. Sharp exchange-rate fluctuations have a major impact on business activity and people's daily lives. The basic task, therefore, is to build an economic structure that is less susceptible to exchange-rate fluctuations. In other words, the most important point is to establish an investment-driven economy and raise Japan's potential growth rate so as to build strong fundamentals.
There is no denying that the weaker-yen trend has gradually been pushing prices higher. In terms of corporate activity, it can boost earnings in some cases, but for Japan's overall national strength over the long term, it would be important for the yen to move moderately toward appreciation. I am aware that some people are concerned that the Bank of Japan (BOJ) may be falling behind the curve in its policy response. Even so, I believe the BOJ is calmly assessing prices, wage-increase momentum, and the international situation, and is making appropriate judgments.
Looking ahead, the crucial question will be whether Japan can continue to secure market confidence, including with respect to interest rates and exchange rates. For example, judging from Prime Minister Takaichi's messaging in connection with the compilation of the FY2026 supplementary budget, I understand that she is highly conscious of securing market confidence. However, as calls for fiscal action—such as a consumption tax cut and expanded defense spending—are expected to grow, the government must communicate continuously and persistently in order to secure market confidence.
(In response to a further question about whether, if current exchange-rate levels persist, there is a risk that the negative impact on people's daily lives will grow) A range of factors will become intertwined, including crude oil price trends amid the situation in the Middle East and the impact of any consumption tax cut. Looking at the exchange rate as a standalone factor, I believe it acts in the direction of pushing the underlying trend in prices somewhat higher.
(In response to a question about whether establishing an economic structure in which prices are less susceptible to exchange-rate movements will require expanding supply capacity and raising the potential growth rate through active domestic investment) When a weaker-yen trend takes hold, high import prices remain elevated, price pass-through advances, and domestic price levels also tend to stay high. One cause of this economic structure is that domestic investment has not been sufficient, leaving supply capacity inadequate.
Japan's Growth Strategy
(In response to a question about his expectations and concerns regarding Japan's Growth Strategy, and his reaction to reports that it will set a target of more than 370 trillion yen in public and private investment by FY2040) I do not yet know the specifics of the strategy, so I cannot comment in detail. However, both the public and private sectors already share the broad direction of promoting domestic investment through public-private cooperation.
The central pillar should be to drive private investment forward under the forthcoming Public-Private Investment Roadmap. The government's role is to create an environment that encourages such investment. We hope the roadmap will improve predictability for private investment and enable individual companies to make medium- to long-term investment decisions. For its part, Keidanren recognizes companies as the main agents of investment, and we are determined to continue advocating an investment-driven economy and working to expand domestic investment.
(In response to a further question about how he views the previous target of 200 trillion yen in domestic private investment by FY2040 in comparison with the public-private investment target under Japan's Growth Strategy) I will refrain from commenting on the public-private investment target figures currently being reported. With regard to the previous domestic private investment target, as the details of the Public-Private Investment Roadmap become clear, the public and private sectors will coordinate and consider what form cooperation should take in implementing public-private investment. I hope this process will lead to results that exceed the previous domestic private investment target, and we should work to expand domestic investment with that mindset.
Japan-China Relations
(In response to a question about how Keidanren will respond as economic organizations such as the Japan Chamber of Commerce and Industry move to send delegations to China) We are aware that other organizations have conducted small-group visits to China. Keidanren also plans to engage in such efforts: Vice Chair Kubota is scheduled to visit Dalian and Beijing in conjunction with Summer Davos, which will be held in Dalian from June 23 to 25. As I have stated previously, we will continue working to seek openings for improving Japan-China relations through various channels.
Discretionary Labor System
(In response to a question about Keidanren's view of media reports that workers at Hitachi, which uses the discretionary labor system, underreported their working hours under an internal rule that excludes employees from the system once overtime-equivalent hours in a month exceed a specified threshold) It is true that Keidanren has recommended the company as a best-practice example of the discretionary labor system, focusing on the fact that its internal rules provide more generous worker protections than the law requires. I will refrain from commenting on the reported case because it concerns an individual company. Speaking generally, accurately ascertaining working hours is extremely important from the standpoint of complying with working-hour regulations, and employers must address this appropriately.
According to the Ministry of Health, Labor and Welfare fact-finding survey on the discretionary labor system, about 80 percent of covered workers said they were satisfied, and about 90 percent said they had discretion over matters such as how they perform their work and allocate their time. In light of these survey results, we understand that most companies operate the system appropriately. Of course, in addition to the reports you mentioned, we are fully aware that labor representatives have voiced concerns about abuse of the system.
I understand that the Ministry of Health, Labor and Welfare plans to conduct a further fact-finding survey. Once actual conditions have been accurately ascertained, we believe that reviewing the system while building in safeguards against abuse—such as ensuring appropriate treatment and preventing long working hours—will be indispensable to expanding the discretionary labor system.
(In response to a further question about the concern that, under the discretionary labor system, workload adjustments may not function effectively and workers may be overburdened, and that labor unions may not be functioning adequately) Based on the Ministry of Health, Labor and Welfare fact-finding survey I mentioned earlier, we recognize that most companies operate the system appropriately. We will wait for the results of the Ministry's upcoming survey. After accurately assessing those results, I would like to reiterate that it will be indispensable to expand the discretionary labor system while firmly incorporating safeguards against abuse.
We recognize that expanding the discretionary labor system is extremely important both for overcoming the labor supply constraints Japan faces and for promoting flexible and autonomous ways of working. We will continue advocating expansion of the system while fully taking into account the views of all parties concerned on safeguards against abuse.
Nissan Motor's General Meeting of Shareholders
(In response to a question about his reaction to the rejection of proposal to reappoint outside directors at Nissan Motor's general shareholders' meeting) We are not in a position to comment on an individual company's management decisions or on the outcome of its general meeting of shareholders. However, I see this as one indication that shareholders are showing stronger interest and commitment than before with respect to matters such as corporate governance and the composition of the board of directors.
We understand that rejections of company proposals have been increasing in recent years, and that the ratio of votes against proposals is also on an upward trend. In any event, it is important for companies to engage carefully in dialogue with shareholders and investors. As Keidanren has already proposed, it is important to promote constructive dialogue aimed at corporate governance that is effective rather than merely formalistic. In such constructive dialogue, companies should also reflect on the extent to which their management has tended to overemphasize dividends. To establish an investment-driven economy, it will be all the more necessary to promote dialogue from the perspective of enhancing corporate value over the medium to long term, including not only returning profits and resources as dividends but also raising the labor share and expanding capital investment and R&D investment.
"Seiho Lady" Name Change
(In response to a question, following the Life Insurance Association of Japan's announcement that the term "seiho lady" will be replaced by the gender-neutral term Seiho Navigator "Sonaeruju," about the view that the work style associated with "seiho lady" reflects Japan's traditional gender norms and entrenches gender-based role assignments) There is no doubt that the life insurance industry has helped advance women's participation in society through the role known as "seiho lady", and that the tremendous contributions of sales representatives have provided people with peace of mind. At the same time, as values and ways of working become more diverse, it is undeniable that the term "seiho lady" is premised on gender, and we view the shift to a gender-neutral title positively. It is also true that, while the former management model involved many female sales representatives working under male managers, more of those representatives are now being promoted into management positions.
(In response to a further question about the view that the "seiho lady" role, centered on commission-based pay and lacking stable employment status, has also kept education, training, and recruitment costs down) The practice of compensating female sales representatives mainly through commissions during the postwar high-growth period was, in my view, one major driving force in popularizing life insurance nationwide and providing people with peace of mind. At times, negative aspects emerged and led to misconduct, but the industry has addressed problems as they arose and continued its efforts to the present day. As for the claim that education and training costs have been suppressed, my understanding is exactly the opposite. In other words, life insurance companies have devoted a large share of their personnel expenses to training and developing sales representatives, and have made considerable investments in this area. With respect to recruitment of sales representatives, it may be true that referral-based hiring, rather than large-scale advertising in newspapers and on television, helped reduce recruitment costs in the sense of advertising expenses. However, my understanding is that the industry has in fact spent substantial sums on training and development after recruitment.