Japanese Prime Minister Fumio Kishida pressed forward with his campaign for higher wages, as a slide in his support rate seems to have halted, and speculation re-emerges that he may opt to call a general election this year. Kishida underscored the need for pay rises to bolster the economy in a speech to Parliament on Tuesday that laid out his agenda for the new session. Dismayed at wage rises falling short of inflation and angered by a widespread political slush-fund scandal, voters sent his disapproval rating to a record level in a recent poll. “We will do everything possible to achieve income hikes that exceed price rises this year. We must make this a reality,” Kishida said in the speech. “The government will do all it can to keep up the momentum,” he added.
Two surveys carried out over the weekend found upticks in support, as Kishida vowed to clear up the scandal that’s rocked his ruling Liberal Democratic Party (LDP). If the trend continues and pay rises exceed inflation, he could be emboldened to seek to renew his mandate, though no general election need be held until 2025. “There’s a theory an election could be held in June,” said Yu Uchiyama, a professor of political science at the University of Tokyo. “Income tax cuts will kick in, and there will be pay rises after the spring wage negotiations, so the economy may improve.”
Despite one of the broadest-ranging scandals in decades, the LDP still boasts far higher support than any opposition group. It would likely stay in power as it has done most of the time since 1955, albeit potentially with fewer seats, if an election were to be held in the coming months. Kishida has ordered income and residential tax rebates to help deal with the cost-of-living crunch, and stepped up his pressure on companies to provide pay hikes that exceed inflation, including in a meeting with business lobbies and labour unions this month.
While inflation showed signs of slowing — falling below 2% in Tokyo data released last week — growing tensions in the Middle East that have pushed up oil prices and shipping costs may renew upward pressure on prices.
Meanwhile, headline wage growth for Japanese workers slowed sharply in November, the latest month for which the government has released data. Nominal cash earnings for workers rose 0.2% from the previous year, decelerating sharply from a 1.5% increase in October, the labour ministry said on Jan 10. While other figures in the release pointed to a stronger growth trend in pay, real wages still declined by 3%. Pay rises will be a major factor in the Bank of Japan’s decision on whether to end negative interest rates, a move widely expected to come this year.
The option remains for Kishida to plough through without calling an election until his three-year term as the LDP president expires in September, by which time a challenger may emerge. A poll by the Nikkei newspaper showed former defence minister Shigeru Ishiba, who has been critical of his own party, was seen as the most appropriate person to be the prime minister, scoring 22% among respondents, compared with 3% for Kishida. While such polls usually bear little relation to the party’s eventual choice, the aftermath of the scandal could play out in Ishiba’s favour. The party groups that have often decided who gets the top position without reference to public opinion have been weakened and in several cases abolished.
The Nikkei found support for Kishida’s Cabinet up one percentage point at 27% in the poll published on Monday, and a Mainichi newspaper poll showed the number up five percentage points at 21%. Both polls still leave support in what as seen as the danger zone for a Japanese prime minister of under 30%. Almost 60% of the respondents to the Nikkei poll said they approved of the scrapping of party factions.
The Edge
