Japan’s new prime minister faces pressure as wages fall for ninth straight month
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Japan’s newly appointed Prime Minister Sanae Takaichi is dealing with a serious problem just weeks into her job as workers can’t buy as much with their paychecks as they used to. Government numbers from Thursday show things getting worse. September marked the ninth straight month of declining real wages. And when you zoom out? Worker buying power hasn’t budged since 2021. That’s putting real strain on families. Here’s what makes it tricky. Workers are actually getting raises — nominal pay climbed 1.9% year over year. But inflation wiped out those gains and then some. Real wages ended up down 1.4%. Takaichi is Japan’s first woman prime minister. She’s pledged to revive “Abenomics,” the late Shinzo Abe’s signature economic approach. Three basic pieces: ultra-easy monetary policy, big fiscal stimulus, and structural reforms. She’s moving fast. As reported by Cryptopolitan, the new prime minister is already planning a 13.9 trillion yen ($92.2 billion) spending package to help households cope with rising prices. Nikkei says the package tops 10 trillion yen, with subsidies for electricity and gas bills, plus help for small and medium companies trying to boost wages. Spending plans could backfire There’s a catch though. That spending could clash with Japan’s inflation fight. Headline inflation has topped the Bank of Japan’s 2% target for 41 months running. It hit 2.9% in September. Household spending that month? Just 1.8%, missing the 2.5% economists expected. Marcel Thieliant at Capital Economics isn’t buying the stimulus approach. “Opinion surveys show inflation is the number one concern for Japanese voters. If Takaichi responds with populist measures such as energy subsidies or cash transfers, that would only enhance those inflationary pressures,” he said. Japan doesn’t have tons of options here. Justin Feng from HSBC warned that an oversized stimulus package funded by government bonds could “potentially diminish…
