Wages Hold Key to Japan Economy in 2025

Tokyo, Jan. 6 (Jiji Press)--Whether Japanese employers will raise wages in 2025 faster than the previous year holds key to the economy's ability to put itself on a domestic demand-led sustainable growth path this year.

Wages need to grow faster than inflation to boost personal consumption, a key engine of economic growth that has been weak because of higher prices.

"It's hard for me to live on my pension if prices continue to rise," a housewife in her 70s said late last month in the popular Ameyoko shopping street in Tokyo, which was crowded with people purchasing ingredients for New Year's dishes.

The average price of the country's traditional "osechi" New Year's cuisine for 2025 was 27,826 yen, an increase of as much as 10.5 pct from three years before, according to research firm Teikoku Databank Ltd.

Japan's core inflation, which excludes volatile fresh food prices, exceeded 2 pct for the 32nd consecutive month in November, when rice prices surged 63.6 pct from a year before, the biggest-ever increase, because of the lingering effect of shortages in the summer.

[Copyright The Jiji Press, Ltd.]