Business Leaders Domestically Optimistic with Pessimism for US Leadership

To celebrate new year, the major business organizations in Japan held the annual meeting of business leaders on January 7th. The leaders revealed their optimistic perspectives on Japanese economy in 2025, willing to raise workers’ wages by 5 percent or more. It is inevitable for them to concern about return of Donald Trump to the presidency of the United States, who upholds imposing higher tariffs on importing goods including them from Japan.

The meeting is held by Japan Business Federation (Keidanren), Japan Association of Commerce and Industry (Nissho) and Japan Association of Corporate Executives (Doyukai), marking the starting of business of the year. It is also known as a venue for the leaders of major corporations in Japan to exchange greetings each other and make their new year resolution to the press.

According to the news reports, the Chairman of Keidanren, Masakazu Tokura, requested the attendees to raise basic salary of workers to implement maintaining stable wage hike beyond price inflation. As the representative for small and mid-size enterprises, the Chairman of Nissho, Ken Kobayashi, hoped to support wage hike for local small businesses which carry regional economic infrastructure, recommending the small businesses to be brave enough to raise the price of their products.

The President of Mitsui Fudosan, Takashi Ueda, hoped to raise their workers’ wage by 5 percent for three consecutive years. The President of Sumitomo Chemical, Keiichi Iwata, aimed at maintaining 5.5 percent of the result in 2024. The expecting chairman of Keidanren, Yoshinobu Tsutsui, unequivocally targeted to 6 percent of wage hike in 2025 in his company, Nippon Life Insurance.

The Bank of Japan has shifted its monetary policy toward gradual rise of interest rate since 2024. The policy may have negative impact on investment. However, the business leaders recognize it as an opportunity for exercising skilled performance for business managers. “Precise assessment on risks and returns will be needed in investment,” said Tomoko Namba, Executive Chairwoman of DeNA.

While Nikkei 225 rallied marking 40 thousand yen, their biggest concern is the Trump risks. The US President-elect has been boasting higher tariffs on goods coming to US namely from Canada, Mexico or China. The business leaders in Japan suppose that the decision of blocking acquisition of US Steel by Nippon Steel would not be easily overturned by Trump.

The Chairperson of Doyukai, Takeshi Niinami, hoped Nippon Steel to work out their struggle in the US court. However, the victory of Nippon Steel is hardly foreseeable. The leaders predict the possibility of change led by US in 2025. “We need to deal with major changes with agility,” told Katsuya Nakanishi, President of Mitsubishi Corporation.

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