Japanese firms plan to return their excess cash to shareholders next year rather than spend it on wage rises, according to a Reuters survey, in a rebuke to Prime Minister Shinzo Abe's call for employers to lift salaries.
Arresting an 17-month slide in real wages is essential if Abe's economic stimulus policies are to succeed in boosting consumption and dragging the world's third-biggest economy decisively out of decades of deflation and stagnant growth.
However, barely one in 10 firms plan to raise wages in 2015, according to the survey of 47 firms. More than 70 percent said they would spend cash reserves on dividends and share buybacks, with most of these also putting investment ahead of wage rises.
Despite surging profits and cash balances, brought about by Abe's massive monetary and fiscal stimulus, employers baulk at raising wages, partly because they are unsure of their ability to pass these extra costs onto consumers through higher prices.
"Abenomics" has pushed the yen down to seven-and-a-half-year lows, giving an
outsized boost to major exporters.
Non-financial firms held a record 233 trillion yen ($1.94 trillion) in cash and deposits at end-September, up 12 percent from when Abe took office two years ago and accounting for about a quarter of their assets, according to central bank data.