1. Top
  2. Executives' Comments
  3. Press Conferences
  4. Chairman Tokura's Statements and Comments at His Press Conference

Executives' Comments  Press Conferences Chairman Tokura's Statements and Comments
at His Press Conference

December 5, 2022

Expectations for the Kishida Administration

No matter the country, any government worries about its support rates falling when prices are rising, and the Kishida administration is no exception. One-by-one, Prime Minister Kishida is seriously and sincerely addressing an array of policy issues?including green transformation (GX), measures to promote start-ups, and investment in people?and steadily achieving results. He has also produced results in the diplomatic sphere, for example through talks with other world leaders.

Japanese politics must not stall in the face of challenging domestic and international circumstances, and I hope that stable management of the administration will lead to continuing policy implementation.

Exchange Rates

Exchange rates reflect economic fundamentals, and it is important for them to move stably. Flows of speculative money driven by the widening interest rate gap between Japan on the one hand and the US and Europe on the other, have had a large impact on recent exchange rate fluctuations. Although the US has not changed its basic stance of using every possible means to control inflation, signs have appeared that price rises are abating, and observers have started predicting that interest rate rises will settle down next year. If this occurs, obviously exchange rates will also stabilize. Keidanren will continue to monitor market trends.

Revenue Sources for Increased Defense Spending

Considering recent geopolitical risks, the government and ruling party are following the right course in planning to increase defense spending in order to dramatically strengthen defense capabilities. To this end, the first step is for the government to make public spending more efficient and rigorously reduce annual expenditure, and then to carefully discuss what revenue sources will be tapped, what the timing will be, and who will shoulder the burden.

Nuclear Power Policy

(In response to a question regarding the government's draft action plan setting fundamental principles and direction for nuclear power policy, released on November 28) I am aware that the action plan provides for investigation aimed at compiling nuclear power policy based on comprehensive consideration of geopolitical risks facing Japan and assurance of the nation's energy security, as well as achieving carbon neutrality by 2050. As well as approving the extension of nuclear power plant operating periods based on compliance with the Nuclear Regulation Authority's safety regulations as a prerequisite, the action plan includes both cost and safety measures aimed at GX such as developing and constructing next-generation reactors and addressing back-end issues, and I evaluate the plan as setting a positive direction.

Spring Labor-Management Negotiations

(In response to a question on Chairman Tokura's views on Rengo's plan for the spring labor offensive released on December 1 and the Japanese Association of Metal, Machinery, and Manufacturing Workers' draft plan for spring labor-management negotiations reported on December 5) Considering that Rengo had set a demand for wage increases of around 4% in advance of this year's spring labor-management wage negotiations, adding in consideration of price increases to lift the level of the demand to around 5% is not surprising in itself. Management has a duty to increase wages to keep pace with rising prices. Through the 2023 report of the Committee on Management and Labor Policy, I intend to call on member companies to increase wages, taking current price increases as an opportunity to realize a virtuous cycle of wages and prices. The momentum of wage increases needs to spread to small and mid-sized enterprises, which employ approximately 70% of workers. Ideally prices will be appropriately passed through Japan's entire supply chain, and Keidanren will continue to focus on encouraging more Declarations of Partnership Building.

Promoting the Smooth Flow of Labor

Leveraging GX and digital transformation to raise productivity throughout Japan is a priority issue at present. Since companies are restructuring their business portfolios in response to changing industry structures, it is essential to facilitate the smooth flow of labor to growth industries and fields, in addition to internal personnel movements. To achieve smooth labor flows, it is vital to respond to changing demands for labor with efforts by workers, companies, and the government, respectively. Workers need to increase their employability by taking the initiative in developing their skills. Companies must support such efforts by workers, for example by conducting re-skilling programs. The government should enhance provision of opportunities for workers to re-skill and examine policies that combine such opportunities with employment safety nets.

China's Zero-COVID Policy

I would like to refrain from commenting on the pros and cons of internal policies in other countries.

China is integral to global supply chains, and various restrictions on movement that accompany the zero-COVID policy have a major impact on the world economy. Such factors are probably behind Prime Minister Kishida mentioning easing of the zero-COVID policy at the recent Japan-China summit. In any case, I hope that COVID-19 policies and economic and social activities will move forward in tandem.

Executives' Comments